The European Central Bank is urging patience on further rate cuts, with officials warning that the effects of new 0 tariffs on inflation and growth remain 1 Council members say the situation is still too unpredictable for the bank to rush into fresh monetary 2 leaders study tariff impact before making next move ECB Governing Council member Edward Scicluna stated that the central bank should take its time before adjusting interest rates, as the global economy is still grappling with the full impact of the new 3 4 explained that inflation in Europe might increase if the tariffs raise the prices of imported 5 at the same time, prices might also fall if the tariffs slow down global trade and reduce demand for goods and 6 said it would be a mistake to make any rash decisions because no one can tell for sure which way this will go.
“It’s not so straightforward whether higher trade tariffs will be disinflationary or inflationary,” he said in an interview on Thursday. “The jury is still out, and we shouldn’t jump to conclusions as this is crucial.” Scicluna also advised people not to expect significant changes at the next meeting by the ECB on October 29–30 in Florence, 7 said the central bank will likely maintain its current rates because the economic situation hasn’t shown any significant improvements in recent 8 December meeting will be more important because, at least, the ECB will have a clearer picture of how the economy is performing by 9 added that anyone inside the ECB must present strong and convincing reasons for another rate cut.
“For me, it would need convincing arguments to support another cut,” he said. “The onus is on those who want to cut further to convince the rest of us.” Policymakers see a stable outlook but fear political and trade risks The European Central Bank released its latest projections in September, which expect inflation to remain closer to 1.7% in 2025 and rise slightly to 1.9% in 10 bank also expects moderate but steady economic growth across the 20 countries that use the 11 numbers show that inflation is slowly moving towards the central bank’s 2% 12 Council member Edward Scicluna stated that the most recent economic data indicate there is no urgent need for the ECB to adjust its interest rates or implement new measures at this 13 explained that it would take months for the effects to spread throughout the economy if the central bank were to change its interest rates at the next 14 this reason, he said the bank should not make any sudden changes that could offset the balance that currently 15 United States recently increased tariffs on imported goods, and analysts said prices would rise because companies and consumers would have to pay more for imports.
However, some economists now argue that the same tariffs could have the opposite effect, lowering inflation by slowing trade and 16 said this is why the ECB must monitor the situation carefully and avoid reacting too 17 also said global industries could face shortages and production would become more expensive if China goes through with its plan to limit the export of rare earth 18 of Estonia’s central bank, Madis Müller, said the supply issues could “reignite price pressures” across Europe and make inflation harder to control if they spread through global 19 head of Germany’s Bundesbank, Joachim Nagel, said the current interest rate feels right for the economy because it’s not too low to cause overheating, and not too high to choke off 20 central bank can utilize this “neutral rate” to observe how the economy performs without introducing new 21 concurred, but also cautioned that global geopolitics can change the economic environment more quickly than it can be predicted in financial 22 advised European leaders to concentrate on domestic reform, invest in innovation, and improve productivity — not “spend so much energy worrying about what is happening on the other side of the Atlantic.” Join Bybit now and claim a $50 bonus in minutes
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