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The ECB needs to lower rates again in December or risk missing its inflation goal, Gediminas Simkus said Friday in Copenhagen. The Lithuanian central bank chief, who sits on the Governing Council, warned that without another cut, price growth could stay stuck below the 2% target. “From a risk-management perspective, it’s better to cut than not,” Simkus said, calling a December move necessary. “The inflation target would benefit, the economy would benefit, so we should do it in December and then wait and see.” He made these comments while attending a meeting of European finance chiefs, where monetary policy was at the top of the agenda. Simkus made it clear that he thinks inflation risks are tilted to the downside. He said weaker imports from China, a stronger euro, and delayed climate-policy rollouts will keep prices down. And he didn’t hold back on what’s coming: core inflation already looks soft, wage growth is slowing, and fiscal spending won’t boost demand anytime soon. “Of course there are some upside risks, but those on the downside definitely dominate,” he said. Simkus pushes for rate cut while ECB majority digs in Simkus is not speaking for most of his colleagues. Since the ECB left the deposit rate at 2% this month, most Council members have shown no rush to cut again. Christine Lagarde, the bank’s president, repeated that borrowing costs are in a “good place” to maintain price stability, a phrase several members have copied in their own remarks. That tone has led economists to walk back earlier bets on more easing. Markets have done the same. Greece’s Yannis Stournaras is one of the dovish members who are happy with the current stance. He said the ECB pulled off a “soft landing” and was right to hold rates steady. France’s Francois Villeroy de…

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Filed under: News - @ September 20, 2025 12:27 pm