ECB’s de Guindos: ‘Any Deviation From Our Inflation Target Would Make Us React’

7 February 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said that the ECB would react if the inflation path deviated from reaching the 2% target.

In a speech at the VI Evento Económico-Asegurador hosted by Mutualidad de la Abogacía in Madrid, de Guindos said that the ECB’s ‘trajectory is pretty clear, [we will] reduce the restriction of our monetary policy always taking into account that any deviation from our inflation target would make us react.’

De Guindos acknowledged that there are risks to inflation and cited the evolution of prices in the services sector as ‘the element that concerns us most’.

‘We think services inflation will slow down and would help us to converge to our inflation target of 2% in a sustainable way’, he said.

In an environment of high uncertainty the ECB had to continue delivering a ‘very prudent’ monetary policy stance and maintain its meeting-by-meeting approach, according to de Guindos.

‘We don’t have a predetermined path for interest rates’, he said.

In the Q&A session, the ECB vice president said that a potential trade war would have a much more negative impact for economic activity than for inflation.

‘Despite tariffs acting like a tax that has an impact on prices, there is also an effect on demand which we have to analyse in terms of its net effect’, he added.