FRANKFURT (Reuters) – The European Central Bank does not have to cut interest rates to a level that will start stimulating the economy because inflation is unlikely to ease below its 2% target, ECB board member Isabel Schnabel said.
“The risk of meaningful and persistent undershooting of the inflation target remains small,” Schnabel said in a presentation for a speech. “Projected growth in 2025 is close to potential, (so there is) no need to go below neutral.”
She argued that disinflation remains on track but the fight against inflation is not yet won so a gradual approach to removing restrictions remains appropriate.
(Reporting by Tom Sims; writing by Balazs Koranyi; Editing by Gareth Jones)
