(Bloomberg) — The European Central Bank will continue to cut borrowing costs in 2025, said Boris Vujcic, a member of the Governing Council.
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“The direction is clear, it is the continuation of the direction from 2024, and that is a further reduction in interest rates,” the Croatian central bank chief told state broadcaster HRT1 in an interview on Saturday.
The ECB cut the deposit rate by a quarter of a percentage point to 3% last week, the fourth step since June. Officials have indicated more steps will follow, though there are differences over how many will be needed.
“I don’t know to what point” the ECB will cut rates, Vujcic said. “That will be determined by data, especially inflation; will slow down, according to our projections, and we will see the impact of the transmission of monetary policy and our projections.”
One area 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, it will be bad for growth in Europe and the rest of the world,” Vujcic said, adding that trade wars tend to boost prices. “We hope there won’t be a trade war, that’s not good for anyone.”
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