ECB's Panetta urges caution on path to lower rates

ROME, March 31 (Reuters) - High uncertainty, mainly due to U.S. trade policy announcements, means the European Central Bank needs to be cautious in reducing its interest rates, governing council member Fabio Panetta said on Monday.

The ECB has cut interest rates six times since last June but provided few signals about its next move after the most recent reduction of its key deposit rate to 2.5% at its March meeting.

"The fight against inflation cannot yet be said to be over," Panetta, who is governor of the Bank of Italy, said in a speech in Rome.

"Increased uncertainty, mainly due to the sometimes contradictory announcements on the United States' trade policies, calls for caution in the path to lower official rates," he added.