{"text":[[{"start":11.1,"text":"A top European Central Bank policymaker has pushed back against the view among some investors that another rate cut over the coming months is off the table, stressing that inflation risks are currently “tipped to the downside”."}],[{"start":27.299999999999997,"text":"In an interview with the Financial Times, Bank of Finland governor Olli Rehn warned against “complacency” about price stability, even though annual inflation has been in line with the ECB’s medium-term 2 per cent target in the past two months."}],[{"start":43.39,"text":"Over the summer, traders have dialled back expectations of another quarter-point cut in the ECB’s deposit facility rate this year."}],[{"start":52.64,"text":"Derivative contracts currently put the probability of another cut by the end of the year at less than 40 per cent, compared to more than 50 per cent in late July, according to LSEG data. "}],[{"start":65.52,"text":"“We have to be mindful of the downside risks to inflation,” said Rehn, who was speaking ahead of the ECB’s next meeting on September 11. He pointed to “cheaper energy, a stronger euro, and contained service inflation”. The ECB is aiming to avoid too much as well as too little inflation, and any sustained undershooting of consumer prices below the 2 per cent target could trigger more rate cuts."}],[{"start":94.19999999999999,"text":"Since the start of the year, the euro has appreciated 13 per cent relative to the US dollar — making imports to the Eurozone cheaper — while the oil price has fallen by 9 per cent. Service inflation, which has been above 2 per cent since late 2021, has fallen to the lowest level in more than three years."}],[{"start":116.38,"text":"In June, ECB staff forecast that inflation would fall to 1.6 per cent next year before rising back to 2 per cent in 2027. Rehn pointed out that those forecasts were “based on assumptions which relied on market data that included one more [rate] cut this year”. While he stressed that this “is not policy guidance for us” it was “certainly important to recall”."}],[{"start":143.35999999999999,"text":"The ECB will publish updated inflation forecasts based on current market expectations for interest rates at its September meeting. "}],[{"start":152.70999999999998,"text":"“There is simply no room for complacency,” Rehn added."}],[{"start":156.70999999999998,"text":"After halving borrowing costs within the space of a year, the ECB kept interest rates unchanged at 2 per cent in July — its final meeting before the summer break."}],[{"start":168.43999999999997,"text":"ECB president Christine Lagarde said at the time that the central bank had shifted to a “wait-and-watch” mode and did not rule out that the next rate move could be upwards."}],[{"start":180.71999999999997,"text":"Rehn, who holds one of the 26 seats on the ECB’s governing council, said that the EU’s trade deal with the US, which was struck after the ECB’s July meeting, had “both negatives and positives”, but was “worse than assumed in our June baseline”."}],[{"start":197.85999999999996,"text":"While the trade deal may help reduce uncertainty, the 15 per cent US tariff on most European exports could trim euro area growth by “some decimal points”, said Rehn."}],[{"start":210.18999999999997,"text":"He added that the EU’s reluctance to introduce retaliatory measures “implies we will not see higher prices of imported US goods in the Euro area”."}],[{"start":221.96999999999997,"text":"Germany’s debt-funded €1tn spending programme would have limited effects on Eurozone growth in 2026, Rehn said, with a bigger impact likely from 2027 onwards."}],[{"start":235.05999999999997,"text":"“I would prefer to see this impacting already in the short term, and that is possible, but it will really depend on how quickly the concrete investment decisions are made,” he added."}],[{"start":255.69999999999996,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1756686795_3674.mp3"}