ECB’s Centeno: Question of When, Not If, Interest Rates Will Be Cut

15 December 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Mário Centeno on Friday said that it was only a question of time for interest rates to be reduced.

In a press conference following the release of the latest Portuguese Economic Bulletin, Centeno, who heads the Banco de Portugal, said that ‘[s]etting a date the first interest rate cut goes against the principle of being dependent on data’, but assured that the time would come.  

‘… when is the appropriate moment for the first move to cut interest rates? It's not a question of if it will happen, because it will happen - once again, I insist, in a context in which there are no surprises, additional shocks, as for example happened with the energy shock in 2021 and 2022 - but when will it happen’, he said.

The ECB would continue to analyse all the relevant economic data meeting by meeting in order to make its decisions, he said.

‘The interest rate reduction cycle will certainly begin earlier in light of the more accelerated reduction in inflation’, he said, though he noted that the disinflationary process would become more gradual and sensitive to base effects.