ECB’s Kazāks: Further Interest Rate Cuts Should Be Gradual and Data-Drive

7 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Following the European Central Bank's first step in reducing interest rates, additional cuts should be gradual and according to a data-dependent approach, ECB Governing Council member Mārtiņš Kazāks said Friday.

In a blog post on the website of the Bank of Latvia, which he heads, Kazāks said, ‘[F]urther reductions in interest rates should be gradual, closely following the dynamics of wage growth, productivity growth and corporate profit margins.’

Even though inflation had significantly declined, ‘victory is not yet in hand’, he said. This was due to the tight labour market and low unemployment, as well as high inflation in service prices, he argued.

‘As before, we will make future decisions in the ECB Council based on the latest data, assessing the situation step-by-step from meeting to meeting’, he sai