When European Central Bank policymakers convene on Thursday, they may decide to lower interest rates further due to diminishing pricing pressure and weakened eurozone economic growth.
On a routine tour away from the ECB’s headquarters in Frankfurt, the 26 members of the governing council are meeting in Slovenia.
Christine Lagarde, the president of the European Central Bank, came before her colleagues and was seen in a video released on social media on Tuesday “checking on prices” at a market in the capital, Ljubljana.
She may have felt more at ease after hearing what traders had to say because, according to new data, inflation in the eurozone has significantly decreased.
In Slovenia, the annual rate of consumer price rises was a mere 0.6 percent in September.
For the whole of the eurozone, the figure was 1.8 percent — the first time it has been below the ECB’s two-percent target in three years.
After cutting rates twice already this year, including at their last meeting in September, policymakers initially signalled a preference to wait until December to cut again.
But September’s below-expectations reading has added to the sense that consumer prices are back under control after they soared in the wake of the coronavirus pandemic and the Russian invasion of Ukraine.
“Victory against inflation is in sight,” French central bank governor and ECB rate-setter Francois Villeroy de Galhau said last week.
“A cut is very likely,” he said of Thursday’s meeting, adding that “it will not be the last”.
