Dutch ECB policymaker Klaas Knot stated on Tuesday that while the European Central Bank (ECB) could gradually lower interest rates if inflation continues to fall, more data is needed before deciding on a September cut. With the next policy meeting just two weeks away, many ECB policymakers support a rate cut in September, with discussions also considering a potential follow-up cut in October. Knot, known for his moderately conservative stance, emphasised that a decision has not yet been made. He noted that as long as the disinflation path aligns with the target of 2 per cent inflation by the end of 2025, he is comfortable with gradually easing policy. However, he stressed the importance of having complete data before making any decisions. Inflation rose to 2.6 per cent in July but is expected to fall to 2.2 per cent this month. Most policymakers believe that current price growth trends are in line with the ECB's projections. Markets have already priced in a rate cut next month and anticipate at least one more cut later this year. Attribution: Reuters Subediting: M. S. Salama
