European Central Bank (ECB) Governing Council member Edward Scicluna said current interest rates are appropriate and there is no immediate need for change. He noted that while trade tensions and the euro’s exchange rate remain risks, the region’s resilience and expected fiscal spending support leaving policy as is.
Scicluna argued that inflation is unlikely to sit exactly at 2% and projections for 2027 at 1.9% aren’t concerning. He described rates as neutral, adding that policymakers will act only if conditions shift materially.
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Scicluna's remarks are from in an interview in Copenhagen, where some of his colleagues at the ECB expressed similar views on their outlook for rates:
- ECB Stournaras signals rate cuts over, more easing needs major shift in inflation outlook
- ECB’s Kazaks: No rush for more interest rate cuts, inflation near 2% acceptable
In summary.
Stournaras (Greece)
- Stance: Rates steady, policy “at a good equilibrium.”
- Key points: Inflation slightly below 2% not enough for more cuts; no reason to act on rates now.
- Next move: No urgency; would only shift on a major shock.
Kazaks (Latvia)
- Stance: Rates appropriate, inflation near 2% acceptable.
- Key points: Minor deviations around target can be ignored; October cut unlikely; December could be reconsidered with new data.
- Next move: Small cut possible in December if projections warrant
Scicluna:
- Stance: Rates “fine where they are,” neutral.
- Key points: Inflation at 1.9% in 2027 not concerning; watching trade tensions and euro FX, but fiscal spending and resilience support steady policy.
- Next move: No urgency; only act if conditions materially change.
