Several ECB policymakers float back-to-back June, July interest rate cuts, say sources

policymakers overwhelmingly back June for a first interest rate cut and some have informally floated the idea of a further move in July to win over a small group that would prefer an earlier start, three sources said on Friday.

The sources, all with direct knowledge of the discussion, said policymakers had spent relatively little time discussing rate cuts on Thursday, and that it was obvious a majority favoured a first move in June. But a few, all from the bloc’s south, would still prefer an initial cut at the ECB’s April 11th meeting.

The sources said the timing of its first move would also influence how a new operational framework — expected to be announced on March 13th — would be implemented. The new framework is likely to require a narrowing of the gap between the ECB’s 4 per cent deposit rate and 4.5 per cent main refinancing rate, sources had told Reuters earlier.

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