European Central Bank president Christine Lagarde and president of the Eurogroup, Paschal Donohoe at a Eurogroup finance ministers meeting in in Brussels on Monday. Interest rates will not be cut this week by the European Central Bank at its last policy meeting before the summer break. This was expected, after a reduction in May, taking borrowing costs down from a record high.
There had been an expectation that following the June cut of a quarter of a percentage point the same might be in prospect for September. Now, however, there are some doubts.remain worried about inflationary risks and the results of the French election has given pause for thought. While the formation of a government remains uncertain, there appears little prospect of, which was 5.
France is one of seven EU countries subject to a European Commission process for countries whose budgets are out of line. Warnings to countries to abide by the euro zone fiscal rules can be expected at Thursday’s meeting. Meanwhile, on Monday euro zone finance ministers, meeting in Brussels, noted that “a gradual and sustained fiscal consolidation in the euro area continues to be necessary” given the need to “reduce the high levels of deficit and debt.
Paschal Donohoe, the Minister for Public Expenditure, who chairs the Eurogroup, noted that phasing out the once off supports and energy credits introduced to tackle the cost of living crisis would do much to get national exchequer back on track. This, however, may not be easily achieved.Seán Moncrieff: I have no idea why a woman at a dinner party decided to tell this untrue story about me
Ireland v South Africa: ‘When you get a win like that it makes your summer. It’s not an exaggeration’The ECB has time on its side. Also, the inflation data suggests that price pressures continue to ease and the general economic environment remains mixed. Given the high level of interest rates, there should be scope for measured continued interest rate reductions later this year. There may be some risks in doing so, but the risks in not moving could be even greater.