ECB’s Makhlouf: ‘There’s No Need to Actually Rush to Make Decisions’

21 July 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Sunday said that ECB did not need to rush to decide on further interest rate cuts.

In an interview with Irish daily Irish Examiner, Makhlouf, who heads the Central Bank of Ireland, said that however bumpy the disinflation process had been, it had been successful.

‘There's no need to actually rush to make decisions', he said. ‘We’ve got no predetermined rate path’, but rather, ‘We're adopting a meeting-by-meeting approach.’

Services inflation was the main source of worry for the ECB and needed to be monitored, he said.

Asked about the Irish economy, Makhlouf said that there was a ‘relatively positive picture’, but that it was important to be vigilant on risks.

‘A concern for me is that there's some sort of disconnect between monetary policy in the euro area and inflation in Ireland’, he said. ‘I'm more worried about what could happen if there was a divergence.’

Ireland faced a bigger risk of inflation returning to high levels because the economy was dealing with more capacity constraints than other countries in the euro area, he said.

‘It's important that domestic policymakers think about the implications of their decisions on inflation,’ he said.