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 readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on September 12, 2025
1 min readLast updated: January 21, 2026
ECB's Joachim Nagel warns that further rate cuts could threaten price stability, as German spending boosts the Euro Zone economy.
(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.
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.
"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)
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.
The European Central Bank decided to leave interest rates unchanged, maintaining an upbeat view on growth and inflation, which dampens expectations for further cuts.
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.
Explore more articles in the Finance category
