Inflation in the euro zone is expected to fall further but the European Central Bank needs more data before starting to cut interest rates, ECB Vice-President Luis de Guindos said on Wednesday.

The ECB has kept rates steady at a record high since September and consistently pushes back on rate cut talk, arguing that wage growth is still too quick for it to sound the all-clear and start unwinding restrictive policy.

"The disinflation process will continue (...) once our projections indicate that the data we receive, on both headline and core inflation, show that we are getting closer to 2%, then the direction of monetary policy will change," De Guindos told Spanish TV broadcaster Antena 3.

The ECB will next meet on March 7 when new economic projections are also presented, seen as a likely trigger for at least a discussion about rate cuts over the following months.

"If the data confirm what I was saying earlier, then the Governing Council of the European Central Bank will change the level of interest rates," De Guindos said.

De Guindos warned against pressure from a rise in wages though productivity evolution was still contained in Europe, triggering an increase in companies' costs. Part of these costs were being absorbed however by their profits, he said.

The ECB has long argued that crucial figures on 2024 wage settlements will only come out in May, so the June meeting will be the first occasion policymakers will have evidence if rapid wage growth is slowing.

Investors are also coming around to this message. They were betting on 150 basis points of rate cuts in 2024 just a few weeks ago, but expectations have receded and now stand at just 88 basis points with the first move seen in June, an unusually large swing in market expectations. (Reporting by Jesús Aguado; additional reporting by Emma Pinedo; editing by Andrei Khalip and David Evans)