ECB’s Kažimír: I Don't Expect Anything that Would Motivate Me to Act in September

28 July 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Peter Kažimír on Monday indicated that he was disinclined to cut interest rates again in September.

In a blog post on the website of the National Bank of Slovakia, which he heads, Kažimír said that last week’s monetary policy decision ‘creates space for us to be able to prepare for whatever lies ahead.’

The ECB needs to remain flexible so as to respond promptly to developments, he said.

‘I don't expect anything fundamental from the incoming economic data that would motivate me to act in September’, he said. ‘I mean changing the level of key interest rates.’

Another adjustment would for him require ‘fundamental problems in the labour market’, he said.

The decision on Thursday to leave rates unchanged reflects policymakers’ increasing confidence about inflation on the basis of incoming data, he said.

Still, the high uncertainty demands ‘extreme vigilance’, he said. ‘We all know very well that the road can be quite bumpy and full of pitfalls.’

Sunday’s trade agreement between the EU and the US was ‘positive’ and ‘welcome’, as it will contribute to alleviating the uncertainty, he said. It would however take time to determine the likely implications for future inflation, he said.

It was not true that inflation risks were all to the downside, he said, pointing to the potential for supply chain disruptions.

‘Personally, I see no signs that inflation will settle permanently below our 2% target’, he said. ‘Its expected decline below target next year should be temporary. It is driven by energy prices and the exchange rate, not underlying problems in the Eurozone economy.’