By Paul Hannon

The European Central Bank will likely lower its key rate by a quarter of a percentage point if it decides to reduce borrowing costs in June, Vice President Luis De Guindos said.

The ECB has signaled that it is likely to cut its key rate next month if economic data are in line with its forecasts. But in an interview published Thursday, De Guindos said the first move would be a reduction to 3.75% from 4%.

"We are taking a prudent approach, which would argue in favour of a reduction of 25 basis points," he told Austria's Oberosterreichische Nachrichten.

Investors expect to see as many as two to three further cuts this year, but De Guindos said policy makers didn't have a clear sense of the likely path.

"There is a huge degree of uncertainty," he said. "We have made no decisions on the number of interest rate cuts or on their size. We will see how economic data evolve.

Write to Paul Hannon at

(END) Dow Jones Newswires

05-23-24 0244ET