During a news conference for the Belgian national bank's annual report, Pierre Wunsch, a member of the European Central Bank Governing Council, emphasized that despite the uncomfortable levels of wage inflation and price increases in the services sector, the European Central Bank will soon need to consider an interest rate reduction.
Wunsch emphasized that the ECB is reaching a point where it can respond to inflation moving in the desired direction. However, he noted that any decision to cut rates will remain a cautious move because service inflation and wage developments are still at levels that do not align with the ECB's objectives.
Despite these concerns, Wunsch indicated that the ECB would not wait until wage growth falls to 3% before implementing rate cuts.
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