ECB’s de Guindos: “Marginally More Optimistic on Growth”, Current Rates Are “Correct”

6 November 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Thursday that the ECB had become somewhat more optimistic about economic growth and that the current level of interest rates remained appropriate.

Speaking at a webinar hosted by Natixis CIB Research, de Guindos said that the ECB was “marginally more optimistic than in previous meetings” regarding growth, in which context he highlighted the resilience of the euro area economy, citing the stronger-than-expected third-quarter GDP flash estimate.

Recent data, he said, supported the ECB’s projection for economic growth of slightly above 1% in 2025.

“On inflation, the news are positive … we are much more optimistic with respect to services inflation,” he said, adding that both services inflation and wage growth had been moderating.

De Guindos reiterated that the current level of interest rates was “the correct one.”

However, he cautioned that uncertainty remained “huge,” pointing to ongoing geopolitical tensions and the potential implications of a US-China trade agreement.

“And finally, another element that we will have to take into consideration is the tremendous increase in competitiveness of Chinese products, and how this is going to have an impact on growth and inflation,” he said.

Asked whether the next policy move was more likely to be a rate cut than a hike, de Guindos said the ECB could be “comfortable” with rates at 2%, given the current inflation trajectory and forecasts. Nonetheless, he acknowledged that evolving risks could alter the outlook.

Regarding the possibility of inflation falling below target, de Guindos said any undershooting would likely be short-lived.

“It is impossible to be at 2% continuously all the time, but you can have some levels a little bit above, a little bit below,” he said. “But, in general terms, I think that the convergence to the 2% without any overshooting or undershooting is now the main the baseline scenario for our projections.”

De Guindos emphasized that the ECB does not target the exchange rate and has no specific threshold for the euro, adding that what matters is the pace of exchange rate movements rather than the level itself.

He also confirmed that quantitative tightening would continue and had not been a subject of debate within the Governing Council.

Fiscal issues had not been “problematic” so far for markets, but they were an “important risk,” he said.