ECB Governing Council Member Mahrouf: The ECB's key interest rate is in a downward channel, but due to uncertain prospects for the Eurozone economy and US policy, the speed of interest rate cuts is still unclear. Due to the cooling of inflation, the ECB has cut interest rates three times since June. It is expected that policymakers will reduce borrowing costs again at the next meeting in December, but investors are uncertain how much interest rate cuts will be. Speaking in London on Monday, Mahrouf said that the “stickiness” of service price inflation is worrying, but there are signs that the job market is relaxing. Although the Eurozone achieved economic growth close to the high end of the range in the three months up to September, a recent survey of purchasing managers shows that economic growth is slowing down. Another uncertainty facing the Eurozone economy is the timing and scale of implementation of the new tariffs advocated by President-elect Trump during the election campaign. Mahrouf said, “Obviously, the policy is still restrictive, and aside from shocks, interest rates are on a downward channel.” “I am open to the pace of this downturn given the volatility and huge uncertainty in the data, as well as the huge uncertainty in the economic policies of trading partners.” Mahrouf said that policymakers should pay more attention to the impact of changes in key interest rates on innovation. In recent decades, the Eurozone has lagged behind the US in innovation. Citing a study, he said that the cost of financing may affect the speed at which new inventions are developed and promoted.

ECB Governing Council Member Mahrouf: The ECB's key interest rate is in a downward channel, but due to uncertain prospects for the Eurozone economy and US policy, the speed of interest rate cuts is still unclear. Due to the cooling of inflation, the ECB has cut interest rates three times since June. It is expected that policymakers will reduce borrowing costs again at the next meeting in December, but investors are uncertain how much interest rate cuts will be. Speaking in London on Monday, Mahrouf said that the “stickiness” of service price inflation is worrying, but there are signs that the job market is relaxing. Although the Eurozone achieved economic growth close to the high end of the range in the three months up to September, a recent survey of purchasing managers shows that economic growth is slowing down. Another uncertainty facing the Eurozone economy is the timing and scale of implementation of the new tariffs advocated by President-elect Trump during the election campaign. Mahrouf said, “Obviously, the policy is still restrictive, and aside from shocks, interest rates are on a downward channel.” “I am open to the pace of this downturn given the volatility and huge uncertainty in the data, as well as the huge uncertainty in the economic policies of trading partners.” Mahrouf said that policymakers should pay more attention to the impact of changes in key interest rates on innovation. In recent decades, the Eurozone has lagged behind the US in innovation. Citing a study, he said that the cost of financing may affect the speed at which new inventions are developed and promoted.