(Bloomberg) -- European Central Bank Governing Council member Mario Centeno said that policymakers will probably cut borrowing costs a few more times this year to support the economy.

Speaking on Tuesday to Bloomberg Television’s Francine Lacqua, the Bank of Portugal governor — one of the more dovish members of the Governing Council — said that its formal approach would suggest a reduction in July shouldn’t yet be ruled out. 

“I expect a few more rate cuts this year,” he said, speaking at the ECB’s annual retreat in the Portuguese town of Sintra. “We need to follow the meeting-by-meeting strategy and hopefully the data continues to come our way.”

ECB officials are weighing when to next lower borrowing costs following an initial cut last month. While slowing, inflation remains above their 2% target, with wage pressures particularly acute. Traders are only fully pricing one more rate reduction this year, with about a 50-50 chance of another.

Centeno remarks contrast with those of more hawkish colleagues this week. Belgium’s Pierre Wunsch suggested that while one more cut will be relatively easy to deliver, any further move requires a clear indication that inflation is heading down to 2%. Chief Economist Philip Lane appeared to suggest that officials won’t have enough information in July to act then.  

Speaking Monday evening at dinner to open the ECB’s annual retreat to Sintra, Portugal, President Christine Lagarde said policymakers are still facing “several uncertainties” over inflation, and it will take time to gather sufficient data to be certain that the risks have passed. 

For Centeno, the need to sustain a soft landing, and to support the factors behind the ECB’s own outlook for a gradual recovery in growth, put an onus on policymakers to act again.

“Our forecast is a lot sustained by a consumption increase,” he said. “This requires real disposable income also to increase, real wages have to catch up from the reduction that we observed during the last couple of years. For all of this to materialize, we need also policy and monetary policy to contribute.”

--With assistance from Joao Lima, Mark Schroers and Alexander Weber.

©2024 Bloomberg L.P.