ECB Executive Board member Cipollone: Economic "contradictory signals" intertwined, interest rate decision needs clearer guidance.

European Central Bank Executive Committee Member Piero Cipollone stated that current economic data is sending out "contradictory signals," and policymakers need to gather more information in order to make a clear judgment on the necessity of further interest rate cuts. In an interview, Cipollone expressed concerns that continued weak consumer confidence could drag down consumer spending, "while uncertainty persists and the effects of previous stimulus policies fade, potentially putting pressure on business investment and exports." However, he also emphasized that the labor market shows resilience, and with plans for increased defense and infrastructure spending in various countries, there is hope for a boost in economic activity in the future. "As more economic data is disclosed by September and in subsequent stages, we will update our macroeconomic forecasts based on this," he said. "It is particularly necessary to pay attention to the impact of trade disruptions on the price levels in the euro area including their impact on the supply chains and the trade diversion effects that have already led to an increase in imports from China to the euro area." This statement comes two days after the European Central Bank announced its decision to maintain interest rates unchanged, without providing a clear indication of the path for future interest rate cuts. One of the key factors that will influence future interest rate meetings is the direction of the trade relationship between the EU and the US currently negotiators representing both sides are striving to reach an agreement before the deadline on August 1st. Data expected to be released next week is predicted to show that the euro area economy stalled in the second quarter, and that the inflation rate in July may slow down to 1.9%.