ECB member calls for considering ‘halt’ to interest rate cuts

The European Central Bank’s (ECB) Executive Board member Isabel Schnabel argued that it is perhaps timely for policymakers to consider a “pause or halt” to the Eurozone’s campaign of interest-rate reductions.

“The data are showing that the degree of restriction has come down significantly, up to a point where we can no longer say with confidence that our monetary policy is still restrictive,” Schnabel told the Financial Times.

“We now have to start the discussion on how far we should go. I’m not saying that we’re there yet. But we have to start the discussion,” she added.

The remarks reinforced rising tensions within the ECB over the economic outlook and mark the strongest sign yet that some of the 26 members of the governing council believe that they soon need to slow down — or even stop — rate cuts.

Meanwhile, Fabio Panetta, Governor of the Bank of Italy, emphasized that growth is weaker than feared. Besides, the consumer-led recovery is not materializing.