Ex-ECB’s Knot: Inflation Risks Balanced, But Shocks Could Distort Stable Situation

3 November 2025

By Marta Vilar – MADRID (Econostream) – Former European Central Bank Governing Council member Klaas Knot said on Monday that he viewed inflation risks in the euro area as balanced, but warned that this stability remained fragile in the face of ongoing volatility.

In a Q&A session at the annual meeting of the Asociación de Mercados Financieros in Madrid, Knot, who headed De Nederlandsche Bank until the end of June, said he “completely” agreed with the ECB’s assessment at its meeting in Florence a week earlier.

He noted that the balance of risks was “very even,” with the ECB “in a good place,” as economic growth was “essentially at potential” and inflation “roughly at target.”

However, Knot cautioned that the situation was vulnerable to disruption amid heightened trade tensions and geopolitical conflicts.

“[T]here is ample opportunity for shocks to disturb this sort of stable situation,” he said.

He added that the ECB should maintain its data-dependent, meeting-by-meeting approach and refrain from offering forward guidance given the elevated uncertainty.