The Knot tells the Nikkei that the ECB must be cautious after the likely June cut

(Bloomberg) -- The European Central Bank should proceed with caution after a probable first reduction in interest rates in June, with quarterly data on wages likely to be key in determining further moves, according to Governing Council member Klaas Knot.Most Read from BloombergTesla Soars on Tentative Approval for Driving System in ChinaStocks Trade for 390 Minutes a Day. Increasingly, Only 10 MatterYen Sparks Intervention Suspicion After U-Turn From 1990 LowsMusk Makes Surprise China Visit in S

Euro zone inflation is falling towards 2% and geopolitical stress poses only moderate risks but the European Central Bank should still exercise caution in cutting interest rates beyond a first step in June, Dutch policymaker Klaas Knot told Nikkei. The ECB has all but promised a rate cut for June 6 and policymakers are now debating how to proceed in subsequent months after oil prices rose and unexpectedly high inflation readings in the U.S. increased the chance that the Federal Reserve will delay the start of its own easing cycle. "I am increasingly confident in the disinflation process," Knot said in an interview on Monday, adding that the June rate cut remains realistic if price and wage data continue to come in line with projections.