ECB Shouldn't Rush Interest Rate Cut, Says Irish Central Bank Governor

The European Central Bank shouldn’t rush into a decision to cut interest rates but remain “very vigilant” of risks that wages might be rising at too fast a clip, according to Irish Central Bank governor Gabriel Makhlouf, who is also a member of the ECB’s rate-setting governing council. The labour market is “amazingly resilient” and economic growth should pick up in the second half, Mr Makhlouf said in an interview, urging patience.

The situation should become “a lot clearer” in the middle of the year. “Wage growth may go in the wrong direction in the sense that there may be too much of a catch up,” Mr Makhlouf said in an interview in the Belgian city of Ghent, where he was attending a meeting of European finance ministers and central bank governors. “If I can, I prefer to take decisions based on a clear picture” and “we can afford to wait.” ECB policymakers are zeroing in on labour costs as key driver of inflation that will help determine the future course of interest rate

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