ECB’s Muller cautious on Oct rate decision, eyes Dec for clearer outlook

ECB Governing Council member Madis Muller struck a cautious tone in comments to Bloomberg, noting that it is “too early to express a clear position” regarding the upcoming October rate decision. While a rate cut cannot be entirely ruled out, Muller suggested that the December meeting would provide a clearer picture, supported by updated economic forecasts.

Muller emphasized that recent data signals downside risks for the Eurozone, highlighting a “weaker near-term outlook” for economic growth. He stated, “There’s a bigger probability that economic growth will be lower, not higher, than the expected number outlined in the ECB’s base-case scenario.”

Despite some positive developments, such as the recent slowdown in wage growth, Muller remained concerned about persistently high services inflation. “On the one hand, wage growth has slowed, which implies that inflationary pressures could be lower looking ahead,” he said. “On the other hand, services inflation was very fast according to the latest data. I’d like to see that slow down further.”