The European Central Bank (ECB) could cut interest rates gradually if inflation continues to fall, but more data is needed before a decision on a reduction in September can be made, Dutch policymaker Klaas Knot said on Tuesday.
With the next policy meeting just two weeks away, more and more ECB policymakers are backing another rate cut in September, and many say the real debate is whether to continue the move with another rate cut in October.
Knot, a moderate conservative on the 26-member Governing Council, took a more cautious view and said the decision was not yet finalized, although there may be grounds for a gradually easier policy.
"As long as the disinflation path is still on the path to return to 2% inflation on or before the end of 2025, then I feel comfortable to gradually take easing measures," said Knot in a conference panel.
"I will have to wait until I have full data and information for the meeting to determine my position as to whether the September action is appropriate," Knot added.
Knot had previously backed rate cuts in September and December, when the ECB issued new economic projections if inflation continued to fall.
Markets have now fully factored in a rate cut next month and at least one more move later this year.
Inflation rose to 2.6% in July, but is expected to decline to 2.2% this month and most policymakers speaking formally or informally think that price growth trends are broadly in line with the ECB's own projections.
