ECB ready in June to discuss rate cuts, de Guindos says

ECB President Christine Lagarde earlier this month said the bank was just beginning to discuss whether to dial back interest rates given a comforting fall in inflation and policymakers on both the hawkish and dovish side of the spectrum have endorsed that timeline.

"We haven't yet discussed anything about future rate moves," de Guindos told Greek newspaper Naftemporiki in an interview. Among the 26 members of the Governing Council, the central bank governors of Spain, the Netherlands, Ireland, Greece and Slovakia have all publicly backed June while ECB chief economist Philip Lane backed a second quarter move, arguing that the ECB would have a"lot more" information by June.

"These two factors together could lead to a significant increase in unit labour costs," he said."And this is a risk, especially for services inflation, because services are labour intensive and shielded from foreign competition."Meanwhile, growth in the euro zone might disappoint, dragging down inflation with it, European Central Bank policymaker Pablo Hernandez de Cos said today.

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