Bundesbank’s Nagel says he is open to another ECB rate cut

BERLIN (Reuters) – Bundesbank President Joachim Nagel is open to considering another European Central Bank interest rate cut at its meeting next week, he told Table Media, adding German economic growth in the second half would be weaker than expected.

The ECB cut rates twice already this year from record highs and markets now expect even quicker policy easing with moves in October and December fully priced in as inflationary pressures are easing faster than policymakers had expected.

“I am certainly open to considering whether we could possibly make another interest rate cut,” Nagel told Table Media, noting the ECB’s interest rate policy had the desired price-dampening effect to date.

“The inflation trend is one of the good news stories. We are clearly approaching our target of 2%.”

Separately the Bundesbank chief said he agreed with the German government’s revision of its forecast for output in Europe’s largest economy this year to a contraction of 0.2% from a previous projection of 0.3% growth.

He also echoed the chancellor’s scepticism of EU tariffs against Chinese car imports.

“Tariffs and mutual protectionism – that cannot be in Europe’s interest. I am clearly in favour of talks and negotiations with China,” he said.