ECB’s Pereira: No Reason to Adjust Rates as Long as Inflation Remains Close to 2%

7 January 2026

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Álvaro Santos Pereira said on Wednesday that the ECB expected inflation to remain close to the 2% target and that there was no need to adjust monetary policy as long as this remained the case .

In an interview with Portuguese broadcaster RTP, Pereira, who heads the Banco de Portugal, said the global economic impact of recent developments in Venezuela would likely be limited.

“Only if the conflict were to spread and affect other countries in the region would the impact become more significant,” he said.

Pereira described the Portuguese economy as “fairly robust,” noting that projected growth of around 2% in both 2025 and 2026 was “not spectacular,” but nonetheless “solid and sustainable.” Inflation, he added, was expected to remain close to the ECB’s target.

Turning to external risks, Pereira pointed to signs of overvaluation in financial markets, “not only in the United States but also elsewhere.” He warned that a correction, particularly a sharp one, would have a significant impact on the global economy, with spillovers to Europe and Portugal.

Asked about interest rates, Pereira said inflation was at target and recalled ECB President Christine Lagarde’s recent assessment that monetary policy is in a “good place.”

“We currently expect inflation to remain close to that target. As long as this continues, there is no reason to change monetary policy,” he said. “Monetary policy has already done what it needed to do: support the economy when necessary.”

Boosting growth from current levels, he added, now fell to governments through fiscal policy measures.