ECB’s Kazāks: Open to September Discussion, Though Services Inflation Sticky and High

30 August 2024

By David Barwick and Isabel Teles – TALLINN (Econostream) – European Central Bank Governing Council member Mārtiņš Kazāks on Friday said that he was open to a discussion of the monetary policy stance at the Council’s upcoming meeting, but that easing should proceed slowly in the context of persistently high services inflation.

During a panel discussion at Eesti Pank, Kazāks, who heads Latvijas Banka, said, ‘I think even with this inflation episode behind us, even with growth gradually coming back, we are still not really on the safe ground.’

‘As for monetary policy, I fully agree with Isabel [Schnabel]’s storyline that we can ease up monetary policy when we see it step-by-step, data-dependent, but inflation in the services sector is still relatively sticky and high’, he continued. ‘So we cannot rush as well.’

The process of easing would therefore be ‘paced’, he said.

‘And I'm open to the discussion in September seeing what's the latest data’, he said. ‘So, fine, of course we're not taking decisions today. We will do that, you know, very shortly at the Governing Council, but we can afford to ease the pressure of monetary policy. But other policies need to step in.’