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    Home > Finance > ECB’s Nagel says further rate cuts would threaten price stability
    Finance

    ECB’s Nagel says further rate cuts would threaten price stability

    Published by Global Banking & Finance Review®

    Posted on September 12, 2025

    1 min read

    Last updated: January 21, 2026

    ECB’s Nagel says further rate cuts would threaten price stability - Finance news and analysis from Global Banking & Finance Review
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    Tags:monetary policyinterest ratesEuropean Central Bankeconomic growth

    Quick Summary

    ECB's Joachim Nagel warns that further rate cuts could threaten price stability, as German spending boosts the Euro Zone economy.

    Table of Contents

    • Impact of Interest Rate Decisions on the Euro Zone
    • Current Economic Conditions
    • Stimulus from German Spending

    ECB's Nagel Warns Against Further Rate Cuts to Maintain Price Stability

    Impact of Interest Rate Decisions on the Euro Zone

    (Reuters) -Further interest rate cuts could jeopardise hard-won price stability as the euro zone economy is already set for a boost from rising German public spending, ECB policymaker Joachim Nagel said in an interview published on Friday.

    Current Economic Conditions

    The European Central Bank (ECB) left interest rates unchanged on Thursday, as expected, and maintained an upbeat view on growth and inflation, dampening expectations for any further cuts in borrowing costs.

    Stimulus from German Spending

    "We have decided to leave our key interest rates unchanged in the current situation because the latest forecasts indicate that inflation is roughly in line with our medium-term objective," Nagel, who is also the President of Germany's Bundesbank, told Italian daily Il Sole 24 Ore.

    "Further interest rate cuts could jeopardize this objective," he added.

    Nagel said increased spending in Germany on defence and infrastructure were already acting as a stimulus for the euro zone economy. "This is having an impact throughout Europe," he said.

    (Reporting by Romolo Tosiani in Gdansk, editing by Alvise Armellini)

    Key Takeaways

    • •ECB's Nagel warns against further rate cuts.
    • •Rate cuts could jeopardize price stability.
    • •German spending boosts Euro Zone economy.
    • •ECB maintains current interest rates.
    • •Inflation aligns with ECB's medium-term goals.

    Frequently Asked Questions about ECB’s Nagel says further rate cuts would threaten price stability

    1What did ECB's Nagel say about interest rate cuts?

    Nagel warned that further interest rate cuts could jeopardize hard-won price stability, especially as the euro zone economy is set for a boost from rising German public spending.

    2What is the ECB's current stance on interest rates?

    The European Central Bank decided to leave interest rates unchanged, maintaining an upbeat view on growth and inflation, which dampens expectations for further cuts.

    3How is German spending affecting the euro zone economy?

    Nagel noted that increased spending in Germany on defense and infrastructure is acting as a stimulus for the euro zone economy, impacting growth throughout Europe.

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