ECB’s Rehn: Data Did Not Support a Rate Cut; Makes Sense to Wait for More Data

31 October 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olli Rehn on Friday said that data had not warranted a rate cut on Thursday and that it made sense to wait for more information.

In a statement on the website of the Bank of Finland, which he heads, Rehn suggested that the “justified” decision to leave interest rates unchanged had been driven by the fact that “inflation and long-term inflation expectations remain close to the ECB’s 2% target, and there have been no major changes to the euro area growth and inflation outlook since our last interest rate meeting in September.”

“There is considerable uncertainty about the inflation outlook for the coming years,” he said. “The current statistical data did not support a rate cut at the October meeting. In this situation, it was reasonable to wait for new data and especially for our comprehensive business cycle projections in December, which includes an estimate of inflation in 2028 for the first time.”

Despite stronger-than-expected Q3 figures, recent data “reinforce the outlook for sluggish growth,” he said.

Meanwhile, core inflation was “stabilizing around 2%," while services and wage inflation were slowing, he said.

There were both upside and downside risks to growth and inflation, he said, pointing to trade tensions and household savings on the one hand and the reduction in uncertainty on the other.

“If private consumption and growth were to accelerate more than projected, inflation could also be faster than projected,” he conceded.

The US-China meeting on Thursday yielded “as expected, reassuring messages about peace in the trade war,” he said, but it was still not clear how tariffs would affect the euro area.

“The effects on growth are negative, and even in the case of inflation, it seems that there are mainly slowing forces at work,” he said.