FRANKFURT, June 6 (Reuters) - The European Central Bank cut borrowing costs from record highs on Thursday, acknowledging progress in its battle against high inflation but also signalling that fight had yet to be won as inflation was set to remain too high until next year.
Following are highlights of ECB President Christine Lagarde's comments at a news conference after the policy meeting.
ONE COUNCIL MEMBER OPPOSED RATE DECISION
"Was it a unanimous decision? Yes, but for one governor. I leave it to your sagacity to identify who it is."
MORE ON WAGES
"While still elevated, we are seeing those wages on a declining path and that will particularly be the case in 25 (2025)"
ON NEUTRAL RATE OF INTEREST
"If it (the neutral rate) has increased compared to where it was before Covid, we also know that we are far away from a neutral rate now. By moving from 4% to 3.75%, we are not close to the neutral rate. We still have a way to go."
LOOKING AT MULTIPLE DATA
"We will be looking at multiple data, not only wages, but you're quite right to take me back to wages because wages matter enormously in a tight labour market."
DATA DEPENDENT
"What is very uncertain is the speed at which we travel and the time that it will take. This will be determined by the data that we receive."
DIALLING BACK?
"Are we today moving into a dialling back phase? I wouldn't volunteer that.
"Is the dialling back process underway? There's a strong likelihood."
ROBUST PROJECTIONS
"It's on the basis of this reliability and solidity and robustness of those (inflation) projections that we have made that decision to actually cut."
GROWTH RISKS
"The risks to economic growth are balanced in the near term but remain tilted to the downside over the medium term. A weaker world economy or an escalation in trade tensions between major economies would weigh on euro area growth."
INFLATION CONFIDENCE INCREASING
"Our confidence in the path ahead has been increasing over the last months."
NOT COMMITTING TO RATE PATH
"We are not pre-committing to a particular rate path."
INFLATION RISKS
"If the world economy grows more strongly than expected, inflation could turn out higher than anticipated... upside risks to inflation also extend from the heightened geopolitical tensions."
ON INFLATION
"Inflation is expected to fluctuate around current levels for the rest of the year, including due to energy-related base effects, and then expected to decline towards our target over the second half of next year."
"Domestic inflation remains high. Wages are still rising at an elevated pace, making up for the past inflation surge, owing to the staggered nature of the wage adjustment process and the important role of one-off payments."
WAGE GROWTH
"Forward-looking indicators signal that wage growth will moderate over the course of the year."
DIMINISHING PRICE PRESSURES
"(Recent data is) confirming the picture of gradually diminishing price pressures."
SUPPORTIVE EXPORTS
"Stronger exports should also support growth over the coming quarters.
RECOVERY TO CONTINUE
"We expect the economy to continue to recover as higher wages and improved terms of trade push up real incomes."
(Reuters Global News Desk)