ECB’s Nagel: Economic Outlook ‘Slightly’ Improved; Rate Pause Was Appropriate

25 July 2025

ECB’s Nagel: Economic Outlook ‘Slightly’ Improved; Rate Pause Was Appropriate
Joachim Nagel, president of the Deutsche Bundesbank, at the Euro20+ Town Hall in Frankfurt on November 30, 2023. Photo by Felix Schmitt/ECB under CC BY-NC-ND 2.0.

By David Barwick - FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Friday said that euro area growth prospects were now somewhat better and that the ECB had been right to pause.

In a statement issued by the German Bundesbank, which he heads, Nagel said that yesterday’s decision by the Council to leave interest rates alone ‘makes sense.’

‘The inflation outlook has remained unchanged since the last projection, and the economic outlook has improved slightly’, he explained. ‘A steady monetary policy is therefore appropriate, also because a lot can happen between now and the next monetary policy meeting.’

The summer would not be worry-free, given the ‘dark cloud’ of US trade policy and the possible geopolitical deterioration, he said.

‘In my view, monetary policy has made a significant contribution to achieving the 2% inflation target’, he said. ‘On this basis, future issues can be addressed with confidence – even if the economic challenges appear enormous.’