ECB’s Elderson: Situation Unchanged Since September; Some Downside Risks Eased

7 November 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Executive Board member Frank Elderson said on Friday that the ECB had decided to keep interest rates unchanged at its last policy meeting because conditions remained broadly as in September and some downside risks had moderated.

Speaking during a Q&A session at the Bundesbank’s Euro20+ Conference in Frankfurt, Elderson said the decision reflected the view that “the situation since our meeting in September had not changed a lot” and that “some things have slightly become better.”

Several of the downside risks to economic growth highlighted earlier in the year “have been mitigated,” he noted, pointing to the EU-US trade agreements, ongoing negotiations between the US and China, and the ceasefire in the Middle East.

“There have been some developments that are clearly to be welcomed,” he said. “But of course, there is still a lot of volatility, a lot of uncertainty; we've seen that things can change and sometimes change very, very rapidly.”

Asked about the impact of higher defense spending, Elderson said the ECB expected this to boost aggregate demand, potentially affecting inflation. How the funds were allocated, he added, would determine whether the increased spending fostered innovation, productivity, or economic growth.