ECB’s Rehn: ‘Governing Council Wants to Retain Full Freedom of Action’

18 March 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Olli Rehn said on Tuesday that the ECB wanted to retain ‘full freedom of action’ and was not going to precommit with respect to its next interest rate decision.

In a webcast organised by MNI Connect, Rehn, who heads the Bank of Finland, said that ‘[t]he Governing Council wants to retain full freedom of action, especially in our current times of pervasive uncertainty’.

The ECB was not precommitted to any interest rate path, he said.

Inflation was seen stabilising around the 2% target, according to Rehn.

‘Risks to the inflation outlook are two-sided’, he said.

An increase in defence expenditures and investment were expected to support GDP growth in the medium term, he said.

However, he argued that uncertainty and trade tensions would hit economic activity.

‘U.S. tariffs and increased uncertainty are already having adverse effects on economic growth outlook in the euro area in the immediate and near term’, he said.

Rehn deemed financial conditions to be restrictive, but acknowledged that some loosening was starting to appear.

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