Olli Rehn, European Central Bank Governing Council member and Finnish central bank chief, said that given the downward trajectory of inflation in the eurozone, the ECB will continue to ease monetary policy, but the pace of this process remains uncertain
"The speed and scale of interest rate cuts will depend on our overall assessment at each meeting of three factors: the inflation forecast, the dynamics of core inflation and the strength of monetary policy transmission," Olli Rehn said, adding that disinflation in the eurozone is "going according to plan", the prospects for economic growth "seem to be deteriorating", and “this strengthens the case for a rate cut at the December meeting.”
The ECB has cut its key deposit rate three times this year, with policymakers signaling another rate cut at next month's meeting, but the pace and scope of further action are unclear. Stronger-than-expected GDP growth in the third quarter and higher inflation in October reinforced the case for caution regarding additional policy easing.
Rehn evaded the question of a 0.5% rate cut in December, saying that the ECB should have “freedom of action.” He added that the ECB “may leave the restricted area in the spring, winter of next year.” However, he warned that this was "just an observation on my part, not an obligation."