ECB’s Müller: We Are Getting Closer to Not Considering Rates to Be High

31 January 2025

ECB’s Müller: We Are Getting Closer to Not Considering Rates to Be High
Madis Müller, governor of Eesti Pank, at the European Central Bank Forum on Central Banking in Sintra, Portugal on June 27, 2023. Sérgio Garcia/ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Madis Müller said on Friday that the ECB was approaching the moment at which rates could no longer be considered high.

In a blog post published on the website of the Eesti Pank, which he heads, Müller said that ‘we are getting closer and closer to a situation where central bank interest rates can no longer be considered high or a hindrance to sensible investments.’

Inflation momentum was decreasing and the economy was still weak, he said, so there was reason to deliver this rate cut.

‘It is entirely realistic that by the middle of this year, price increases in the euro area will be very close to the central bank's target of 2%’, he said.

Economic recovery was expected to take place slowly in 2025, as well as the increase in real wages, according to Müller.

‘[A]lthough there are many negative comments about the near future of the European economy, at least from the central bank's point of view, the so-called baseline scenario is not directly pessimistic’, he said.

Growth will stem from rising incomes and purchasing power as well as lower interest rates, he indicated.

 

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