The Central Bank’s Interest Reduction Campaign (ECB) will end soon, as both the inflation As well as the economy on the right track, the Executive Council member Isabelle Snebel said.
“This currency policy is coming to an end – after the ECB has eightened in a row reduction of interest rates – as medium -term inflation stabilizes around the target,” the German official said Thursday (12.6.2025) in Brussels. She described the underlying Increasing consumer prices – projected to be 1.9% in 2026 and 2027 – as “exactly on target”.
Sneabel stressed that growth prospects are “generally stable, despite the trade dispute” and that the ECB’s policy “has been moved smoothly to funding conditions, which are no longer restrictive”.
Following the eighth reduction of interest rates within one year, ECB President Christine Lagarde said last week that relaxation is approaching its end, with the ECB now able to face the dominant uncertainties – especially because of US trade policy.
According to the latest ECB forecasts, inflation will fall to 1.6% in 2026, before returning to 2% in 2027while growth will recover thanks to most public spending in Germany. Speaking to Chinese CCTV today, Lagarde stressed that “we have stabilized prices at the level we expected, we are within the range of our medium -term target, which is 2%, and we are in a good position to withstand future shocks.”
While some policymakers believe that the cycle is probably already completed, others have highlighted the possibility of more cuts. The deposit rate is currently 2%, a level that is generally considered neutral, so it neither restricts nor stimulates demand.
Earlier today, members of the ECB’s Board of Directors made statements about interest rates reductions. Gutymina Simks called for a cessation of interest rates, citing a “great uncertainty” on US duty policy, while Frenchman Francois Vilua de Galo said he had no “stable position” on future action.