Bostjan Vasle, a policymaker at the European Central Bank (ECB), has advised a cautious approach to interest rate cuts amid ongoing inflation uncertainties.

He noted that inflation in September was lower than expected, with both core and underlying inflation moving closer to the ECB's medium-term target of 2%.

In a recent interview, Vasle suggested that upcoming data trends could support a 50 basis point cut in interest rates.

Concerns have been raised by several policymakers, including Mario Centeno and Francois Villeroy de Galhau, about inflation potentially undershooting the ECB's target.

The ECB has acknowledged that the disinflationary process is progressing well, although recent economic activity indicators have been disappointing.

Earlier this month, the ECB reduced borrowing costs by a quarter point for the second consecutive meeting, signaling a shift in monetary policy.

Lagarde emphasized that future monetary policy decisions will depend on forthcoming economic data, indicating no predetermined path for interest rates.

Economic conditions in the Eurozone are deteriorating, with inflation falling below earlier predictions, raising concerns about price growth not meeting the ECB's target.

This marks the first back-to-back interest rate cuts in 13 years, reflecting a significant shift from previous hikes aimed at controlling inflation.

Centeno believes there is room to stimulate the economy through increased spending and investment before potential unemployment rises hinder growth.

Vasle warned that inflation is not fully under control, particularly in services, and that rapid wage growth indicates ongoing inflationary pressures.

A growing faction of policymakers is advocating for deeper cuts to prevent inflation from dropping too low amid rapidly deteriorating economic conditions.