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Best time for rate cut may be end of first semester - ECB's Stournaras

European Central Bank policymaker Yannis Stournaras has said that the "optimal timing" for the first rate cut might be the end of the first semester if inflation continues to decelerate and wage data is supportive.

ECB President Christine Lagarde said last week that fourth quarter wage growth data was encouraging but not yet enough to give the bank confidence that inflation has been defeated.

"Inflation decelerates faster than our December projections and it is very likely that we will closely approach our 2%inflation target in the autumn of the current year," Stournaras said in a speech at Liverpool University on 26 February.

He added that the recent slight deceleration in negotiated wages was encouraging and much will depend on the evolution of profit margins, since overall cost developments, including energy costs, indicate a further easing of price pressures in the near term.

(Source: Reuters)

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