European Central Bank vice president Luis de Guindos said on Monday that risks have intensified amid exceptional uncertainty, largely linked to trade tensions. "Euro area exporters are now facing new barriers, and tensions in financial markets and geopolitical uncertainty will likely weigh on business investment," he noted. "In this environment, consumers may become cautious about the future and hold back spending."
The official added that incoming data suggests modest growth in the first quarter of 2025.
Looking ahead, de Guindos expects inflation to hover around the ECB’s 2% target, noting that the trade war could weigh on prices and slow inflation.
He also emphasised that the ECB is not pre-committing to a particular rate path and will continue to follow a data-dependent and meeting-by-meeting approach to setting the appropriate monetary policy stance.