ECB’s Patsalides: Next Rate Move Could Be in Either Direction

12 September 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Christodoulos Patsalides on Friday said that the ECB would not need to change official interest rates again soon and that when it did, it could be in any direction.

Patsalides, who heads the Central Bank of Cyprus, told Bloomberg in an interview that “[t]he present interest rates are appropriate if inflation develops as projected.”

“So unless there’s any other significant development, there’s no need to take action soon,” he said.

According to the news agency, Patsalides said it was “fair to say that the risks to inflation are balanced” and that in this context, “interest rates could go either way next.”

All options were open, but “I wouldn’t like to exclude a rise in interest rates if the need arises,” he said.

Patsalides called projected 2026 HICP “a short-term deviation from our 2% target,” with the ECB “back to 1.9% in 2027.”

There was therefore no “reason to be too worried about a more permanent undershoot of inflation,” he said.

As for the downward revision for 2027 from 2% seen in the June projection exercise, the two forecasts were “more or less the same,” he said being “due to technical assumptions, like the exchange rate, as opposed to something fundamental.”

It was therefore “sensible to keep powder dry,” he said.