ECB’s Rehn: Next Rate Move Not Necessarily Up After 2.0% Hold

19 December 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olli Rehn on Friday said policymakers were not pre-committing to any interest rate path after keeping the ECB’s key rate unchanged at 2.0% at Thursday’s meeting.

In remarks at the economic outlook briefing of the Bank of Finland, which he heads, Rehn said that the next rate move would not necessarily be a hike, but that the Governing Council would keep “its full freedom of action” and decide “meeting by meeting” based on incoming data and analysis.

“The inflation forecast was revised slightly upwards, as service and wage inflation has been slightly faster than forecast in recent months and economic growth is slightly stronger than previously expected,” he said. “Nevertheless, inflation may also be faster than forecast in the coming months.”

“On the other hand, there are still downside inflation risks, he said. “Growth is not very fast, despite the pick-up, tariff increases may have a dampening effect on euro area inflation, and wage growth may slow even faster than currently forecast.”