ECB’s Nagel: Cut Was the Right Move, Inflation Headed in the Right Direction

13 September 2024

By Marta Vilar - MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel expressed support on Friday for the ECB's rate cut on Thursday, arguing that it was justified by inflation moving in the right direction.

In an interview with German national radio channel Deutschlandfunk, Nagel, who heads the German Bundesbank, said, ‘We assume that core inflation will improve, especially with the declining wage trend in the Eurozone.'

Also with respect to wage developments, 'things are moving in the right direction’, he said.

The ECB was well on the way to getting inflation back to its target of 2% by the end of next year, according to Nagel.

The latest rate cut was not a concession to Germany, he said. Germany is currently one of the worst performing economies in the euro area.

Asked about a possible takeover of Commzerbank by Italy's UniCredit, he said it was clear that strong and robust banks were needed.

‘In a banking merger — however it turns out — it comes down to business models complementing each other and whether we end up with a bank that’s competitive,’ he said.