ECB’s Kazāks: Rate Move Needed if Inflation “Consistently and Significantly Below 2%”

17 October 2025

By Marta Vilar – WASHINGTON (Econostream) – European Central Bank Governing Council member Mārtiņš Kazāks said on Friday that the ECB would have to adjust interest rates if inflation was at risk of persistently undershooting its 2% target.

Kazāks, who heads the Latvijas Banka, told Bloomberg that the ECB was “focusing on the medium term to deliver 2% and there’s going to be some volatility around it.”

“But if there is a risk that inflation is consistently and significantly below 2%, and for a longer period of time, then of course we will need to move,” he added.

He emphasized that decisions would not hinge on a single data point, but on a broader set of indicators showing whether the risk of undershooting was both persistent and substantial enough to warrant a move.

Policymakers could “take a bit of time to look at the data,” he said, noting that inflation expectations remained broadly anchored to the target.

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