The next interest rate cut by the European Central Bank is not likely to happen anytime soon, given the recent rebound in inflation, said Robert Holzmann, a member of the ECB’s Governing Council, on Saturday.
„I don’t see any interest rate cut at this moment. However, what could happen is that it will take longer until the next interest rate cut,” Holzmann told the Austrian newspaper Kurier, as reported by Reuters.
Annual inflation in the euro zone accelerated in November to 2.2%, up from 2.0% a month earlier and above the ECB's 2% target.
"Yes, there are signs of an upward trend in energy prices. But there are also other scenarios regarding how inflation could rebound, such as through a stronger depreciation of the euro," said Holzmann, who is the head of the Austrian central bank.
Holzmann, widely seen as a staunch advocate of anti-inflation policies, was also asked about the prospect of the future U.S. President, Donald Trump, imposing trade tariffs and how it could impact economic growth, price pressures, and monetary policy.
"A likely scenario is that Trump's tariffs will lead to a general slowdown in growth, but also create inflationary pressure. More in the U.S. than here," Holzmann said.
"The strength of the effect will essentially depend on whether and how much the dollar appreciates and the euro depreciates."