Posted By Global Banking and Finance Review
Posted on February 25, 2025
FRANKFURT (Reuters) - The interest rate that neither slows not spurs euro zone growth has increased "appreciably" in the past two years and it was no longer clear that the European Central Bank's 2.75% deposit rate is still holding back the economy, ECB board member Isabel Schnabel said.
"The natural rate of interest in the euro area has increased appreciably over the past two years, and even more so than what market-based real forward rates would suggest," Schnabel said in a speech on Tuesday.
"It is becoming increasingly unlikely that current financing conditions are materially holding back consumption and investment," Schnabel said in London. "The fact that growth remains subdued cannot and should not be taken as evidence that policy is restrictive."
(Reporting by Balazs Koranyi; Editing by Francesco Canepa)