ECB’s de Guindos: ‘Need to Be Extremely Prudent When Determining the Appropriate Stance’

3 April 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Thursday said that monetary policymakers needed to be ‘extremely prudent’.

In a speech at the International Federation of Accountants’ Chief Executives Forum, de Guindos, according to a text provided by the ECB, said ‘’In terms of monetary policy, this uncertainty means we need to be extremely prudent when determining the appropriate stance.’

‘While most indicators point to inflation moving in the right direction, the environment of exceptional uncertainty requires us to stick even more closely to our data-dependent and meeting-by-meeting approach’, he said.

Disinflation remained ‘well on track’, with wage growth and services inflation decelerating, he said. ‘Most measures of underlying inflation suggest that inflation will settle at around our 2% inflation target, on a sustained basis’, he said.

However, he was quick to caution that uncertainty pertaining to the evolution of inflation was high, due principally to trade tensions. These could lead to a weaker euro and risen import costs, while spending on defence and infrastructure could also produce price pressures, he said.

‘At the same time, lower demand for euro area exports and lower growth resulting from the impact of higher tariffs or geopolitical tensions could pose a threat to the economy, depress demand and push inflation down’, he added.