Banking

ECB’s data cautions against cutting rates soon, executive board member says

Isabel Schnabel cited issues such as a resilient labour market, a notable loosening of financial conditions and tensions in the Red Sea

Isabel Schnabel, member of the European Central Bank’s executive board at the 33rd Ambrosetti Workshop On Economics and Finance at Villa D'Este in Italy. Picture: Getty

Recent economic figures and aggressive market bets on rapid interest-rate cuts mean the European Central Bank (ECB) should be patient before loosening borrowing costs, according to Isabel Schnabel, an ECB executive board member.

She cited sticky services inflation, a resilient labour market, a notable loosening of financial conditions and tensions in the Red Sea. Schnabel said this data cautioned against “adjusting the policy stance soon”.

She added: “It means we must be patient and cautious ...