ECB’s Müller: May Become Sufficiently Confident in Coming Months

8 March 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Madis Müller on Friday said that the ECB may in the next months gain the necessary confidence whose lack had motivated yesterday’s decision to leave rates untouched.

In a blog post on the website of the Estonian central bank, which he heads, Müller said that the ECB had ‘decided to leave the interest rates unchanged, because we need a firmer confirmation that the trend of falling prices will continue before starting with interest rate cuts.’

‘It is possible that this sufficient feeling of confidence will already arise based on the economic indicators of the coming months’, he added.

The results of wage negotiations that have not yet concluded ‘are important’, he said. Although higher wages make up for the loss to inflation of purchasing power, ‘unfortunately it is also clear that a wage increase permanently close to 5% would make it more difficult for the euro area inflation to slow down further.’

According to Müller, growth remains at a standstill, but indications of possible improvement are mounting.