ECB’s de Guindos: So Far Middle East Conflict Has Not Derailed Disinflation Process ‘At All’

24 June 2025

By Marta Vilar – SANTANDER, Spain (Econostream) – European Central Bank Vice President Luis de Guindos said on Tuesday that he did not believe that recent developments in the Middle East conflict had derailed the disinflation process in the euro area so far.

In remarks at a Q&A session in a seminar organised by the Association of Spanish Financial journalists and Universidad Menéndez Pelayo in Santander (Spain), de Guindos said that ‘everything can change, we have to stay alert, but based on what we're seeing today, I don’t think the disinflation process has gone off track at all.’

The evolution of inflation was very positive, according to de Guindos, who pointed out that inflation was now below target at the headline level and closer to 2% in core.

‘And in services, which was our main concern, we have also seen a steady slowdown, just like in wage growth’, he added.

The risk of supply chain fragmentation stemming from trade tensions was not incorporated in the ECB’s latest projections, he said, and could bring about inflation pressures in the medium-to-longer term.

'I believe the current level of interest rates, as President Lagarde said, puts us in a good position to deal with this uncertainty’, he said.

The ECB wanted to keep as much optionality as possible due to the high uncertainty, he said.

‘I know some of my colleagues on the Governing Council frequently comment on what direction policy should take’, he said. ‘I try to be more cautious, because, as I mentioned earlier, the level of uncertainty is extremely high, and also, out of respect for the decisions made by the Governing Council.’

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