ECB’s Escrivá: ECB Hasn't Said a Cut Is Likelier Than “a Move in the Other Direction”

8 October 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member José Luis Escrivá said on Wednesday that there had been no indication from the ECB that an interest rate cut was more probable than a hike.

In a panel discussion at the Bloomberg Spain Economic Outlook Future of Finance Madrid 2025 conference, Escrivá, who heads the Banco de España, said the Governing Council had judged risks to inflation as “very balanced.”

“I don't see in the statement of the ECB any indication of another cut as more likely than the move in the other direction,” he said.

Markets were anticipating interest rates to remain stable “for some time,” he said, given expectations that the baseline scenario would continue to materialize. “We are in a good place,” he added.

Upside inflation risks, he said, could stem from fiscal policy, supply chain disruptions stemming from trade tensions and non-tariff provisions in the US-EU trade agreement.

By contrast, Escrivá cited the diversion of cheap Chinese goods to Europe and weaker-than-expected demand in the euro area as the forces that could create downward pressure on inflation.

“If you examine our projections, we have been claiming that risks to growth were primarily on the downside, but over the last five quarters the central scenario has been materializing all the time and these downside risks have not emerged”, he said.

Asked which risks were stronger, Escrivá repeated that they were “very much balanced” and that inflation was currently at 2% and projected to remain around that level.

“Expectations are very well anchored at 2% and risks are I would say balanced, very much two-sided,” he said. “I don’t see any need of any forward guidance.”

Escrivá also pushed back against Governing Council member Olli Rehn’s earlier remarks that a strong euro was among the key downside risks.

The euro, he said, had been trading close to its 10-year average, and its appreciation earlier in the year could equally be seen as a correction of past weakness.

“I would not overemphasize this factor at present,” he said. “Maybe a few months ago, it might have been something focal.”

The ECB had to keep “full optionality” and be “cautious”, according to Escrivá, who said that despite the materialization of the baseline scenario uncertainty was still high.