FRANKFURT (Reuters) – The European Central Bank (ECB) will be able to discuss a cut in interest rates in June, its vice-president Luis de Guindos said on Tuesday, joining a long list of ECB officials. institution which make the June 6 meeting the potential start of the bank’s monetary easing.

ECB President Christine Lagarde said earlier this month that the bank was just beginning to discuss whether to cut key rates amid falling inflation. The various ECB officials, whether considered “hawks” or “doves”, also approved this timetable.

Investors in the market are, however, somewhat skeptical and a reduction in borrowing costs is considered 100% certain only for the month of July, as they increasingly fear that the US Federal Reserve (Fed) will postpone its first cut rates and that the ECB is hesitant to get the ball rolling in this area among the major central banks.

“We have not yet discussed future movements on rates,” Luis de Guindos said in an interview with Greek newspaper Naftemporiki. “We need to gather more information. In June we will also have our new projections and we will be ready to discuss them.”

Among the 26 members of the governing council, the central bank governors of Spain, the Netherlands, Ireland, Greece and Slovakia have all publicly spoken out in favor of June for a reduction in the cost of credit . The ECB’s chief economist, Philip Lane, for his part, said he was in favor of such a decision in the second quarter, arguing that the ECB would have “much more” information by June.

For Luis de Guindos, the main risk that would threaten this timetable is the combination of rapid wage growth and low productivity.

“These two factors combined could lead to a significant increase in unit labor costs,” he said.

“This is a risk, particularly for inflation in services, as these are labor intensive and protected from foreign competition,” he added.

(Reporting Balazs Koranyi; Claude Chendjou, edited by Blandine Hénault)

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