Captivating News Headline: ECB/Patsalides: Room to Further Reduce Borrowing Costs

According to ECB Governing Council member and Central Bank of Cyprus Governor Christodoulos Patsalides, as the inflation target is approached, the European Central Bank has room to further reduce borrowing costs but must be very mindful of upward risks. Patsalides noted, "While the euro economy is undoubtedly slowing and may be weaker than the latest forecasts suggest, the same cannot be said for price pressures." He stated, "If there are no upward surprises in inflation, we can and should continue to lower our interest rates. December is an important month because much more data, including new projections, will be available. Therefore, we will be in a better position to assess our stance." Patsalides advocated for gradual steps instead of "serious cuts" to avoid fueling volatility and uncertainty. He argued that proceeding with half-point steps would only be justified "if the situation significantly worsens." He added, "The eurozone economy is slowing, but it is still on track for a soft landing. However, there are risks, such as geopolitical shocks. The global environment is becoming more risky and less predictable."