The European Central Bank (ECB) should maintain the cost of borrowing at current levels, with the risk of inflation leaning upwards, says Isabelle Snabel, a member of the Executive Council, in Reuters.
In an interview published Tuesday (2.9.2025), the ECB’s hard -core German official said the European economy is well -resistable despite US trade disorders, but that prices may exceed forecasts in the coming years. “I believe that we may already be slightly different and, therefore, I see no reason for further reducing interest rates in the current situation,” Snabel said. “I still believe that duties are purely inflationary.”
The comments come just two days ago a week ago that precedes the next ECB meeting on monetary policy on September 11, where officials are expected to maintain borrowing costs unchanged for the second time.
Later today, Eurostat will publish a first estimate of inflation in the eurozone in August, with analysts predicting a slight rise to 2.1% from 2% in July – just above the ECB target.
Schwabel said before the July meeting that there is a “very high limit” for further relaxation – a view that has been repeated by several of its colleagues. With prices rising around 2% and the economy continuing to grow, they believe that interest rates are at a good level for the time being.
Schwabel said that the rapid increase in food costs in the US, coupled with tariffs and expansive budget policy, means that the balance of inflation is “leaning up”. Reject the concerns about a persistent devaluation of the target for prices.
“I find it very unlikely that there will be disconnection of inflation to inflation, especially after so many years of too high inflation,” Snabel said.