ECB’s Šimkus: No Need for Further Rate Cuts as Economy Proves Resilient

10 December 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gediminas Šimkus said Wednesday that ECB interest rates don’t need to be lowered further, pointing to stronger-than-expected economic activity and inflation close to the ECB’s medium-term target.

In an interview with Bloomberg, Simkus, who heads the Bank of Lithuania, said downside risks in the euro area have materialized “to a lesser extent than feared,” noting indicators such as the recent upward revision to third-quarter GDP.

“We have an inflation rate that is more or less close to the 2% target in the medium term, which suggests no need for a change in interest rates — not only at the next meeting in December but also in further meetings,” he said.

He described risks to both inflation and growth as “fairly balanced,” adding that the December 18 policy decision, where no change is expected, “is not going to be a difficult one.”

Šimkus also pushed back against suggestions that rate hikes could soon be required. There is “no evidence” of inflation rising above the 2% goal, he said, cautioning that “what the past few years have taught us is not to outline the very distant perspective and to say things will happen this way or another way.”