ECB’s Rehn Rejects Cutting Rates Anew Just for ‘Insurance’

23 August 2025

ECB’s Rehn Rejects Cutting Rates Anew Just for ‘Insurance’
Olli Rehn, governor of the Bank of Finland, at the ECB Forum on Central Banking in Sintra, Portugal, on July 2, 2025. Photo by the ECB.

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olli Rehn on Saturday dismissed the idea of lowering official euro area interest rates again just for the ‘insurance’ such a cut would provide.

In an interview with Bloomberg on the margins of the Federal Reserve’s annual Economic Policy Symposium, Rehn, who heads the Bank of Finland, said, ‘Inflation is for now in a good place. Any insurance cut just for its own sake wouldn’t be necessary’, even if ‘the ECB must of course be mindful of the risks.’

According to the news agency, Rehn affirmed that ‘[t]he economy has been showing resilience and inflation is for now within the target’.

‘That means we have space to reflect on the next steps’, he said. Nonetheless, monetary authorities would act at any meeting at which it was deemed necessary, he said. There was ‘no reason for complacency’ on the inflation front, he said. ‘We have to be alert and mindful of downside risks.’