Peter Kazimir, Slovak central bank chief and European Central Bank Governing Council member, said that if the new economic data from the eurozone turns out to be favorable, the ECB could cut its interest rates two more times before the end of 2024.
"The ECB may continue to ease monetary policy if the environment warrants and justify such action. Financial markets are now expecting two more rate cuts before the end of the year. Although this is not entirely inappropriate, it should not be taken as a given or a baseline scenario," Kazimir added.
Last week, French governor Francois Villeroy de Galhau and governor of the Bank of Lithuania Gediminas Simkus also supported market expectations for two more rate cuts this year, in September and December.
Meanwhile, the ECB said that the latest Survey of Professional Forecasters (SPF) showed that respondents' expectations for headline inflation, as measured in terms of the Harmonized Index of Consumer Prices (HICP), remained unchanged for the current and next year, but were revised downward for 2026. "Headline HICP inflation expectations unchanged for 2024 and 2025, at 2.4% and 2.0% respectively, and revised marginally downward for 2026 to 1.9% from 2%. Expectations for core HICP inflation were revised upward slightly for 2024 (up 2.7% from 2.6%) and 2025 (up 2.2% from 2.1%). Expectations for core HICP inflation for 2026 remained at 2%," the ECB said.
According to the final data from Eurostat, the consumer price index rose in June by 2.5% per year, as expected, after an increase of 2.6% per year in May. European Union annual inflation was 2.6% in June, down from 2.7% in May. Meanwhile, on a monthly basis, the consumer price index rose again by 0.2%, confirming economists' forecasts. This was the fifth increase in a row, but the weakest in this series. The core consumer price index - excluding energy, food, alcohol and tobacco - rose by 2.9% per year, as expected, after a similar increase in May.