ECB rate cuts will continue next year, Vujcic says
(Bloomberg) — The European Central Bank will go on lowering borrowing costs in 2025, according to Governing Council member Boris Vujcic.
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“The direction is clear, it’s the continuation of the direction from 2024, and that is the further reduction of interest rates,” the Croatian central bank chief told state broadcaster HRT1 in an interview Saturday.
The ECB last week cut the deposit rate by a quarter point to 3%, the fourth such move since June. Officials have indicated that more steps will follow, though the differ on how many will be necessary.
“I don’t know until what point” the ECB will cut rates, Vujcic said. “That will be determined by data, primarily the inflation rate, will it decelerate, according to our projections, and we will see the impact of the transmission of the monetary policy, and our projections.”
One point of uncertainty weighing on the outlook is the threat of tariffs after Donald Trump returns to the White House next month.
“If there is a trade war, that will be bad for growth in Europe and in the rest of the world,” Vujcic said, adding that trade wars typically fan prices. “We hope we won’t see a trade war, that won’t be good for anyone.”
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