ECB’s Makhlouf: Next Interest Rate Move Could Go Either Way; Inflation Risks Tilted to Upside

15 October 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Wednesday suggested that the ECB’s next interest rate move could be up as easily as down, and characterized inflation risks as tilted to the upside.

Makhlouf, who heads the Central Bank of Ireland, told Bloomberg that “the next move is two-sided” and that he was “not in the camp of those who think that we need another cut.”

“I’m in the camp that says we’re probably in a fine position, but we need to pay attention to the fact that actually there are price pressures out there,” he added.

Makhlouf said that he was “more focused on pressures that are going to push inflation up rather than pressures that are going to reduce growth,” and “more worried that we’re going to be over than under 2% [inflation].”

Inflation risks were “slightly skewed to the upside,” the agency quoted him as saying. The latest developments gave him “more confidence” in the ECB’s growth projections, he said.

“Things could change very quickly — look at China’s decision to restrict the supply of rare earths and the US threatening a 100% tariff,” he said. “But leaving that aside, the European economy has shown resilience.”

Makhlouf confirmed the impression that another rate cut was unlikely for the foreseeable future. “I don’t think markets are wrong” in this respect, he said. “We could be at this point now where we’re delivering our target.”