Bundesbank President Joachim Nagel has stated that the European Central Bank currently sees no need to further reduce interest rates. “There is currently no compelling need for action” Nagel told the “Frankfurter Allgemeine Zeitung” (Saturday edition) and the Italian newspaper “Il Sole 24 Ore” confirming the ECB’s decision to maintain its current interest rate level established on Thursday.
Addressing the ECB’s recent policy stance, Nagel noted that August’s inflation rate in the Eurozone stood at 2.1 percent, only marginally above the institution’s medium-term target. Forecasts from the ECB’s economists suggest inflation will remain close to 2 percent over the coming one to two years.
Nagel highlighted the notable shift from the double-digit inflation rates experienced in the autumn of 2022, describing that period as “a bitter time, especially for low-income earners”. He emphasized a return to price stability, which he views as “good news for consumers, whether in Germany, Italy, or elsewhere in the Eurozone.
The Bundesbank President also commented on the abandoned plans for a new, multi-billion euro headquarters in Frankfurt. Currently, his institution is undertaking a cost-benefit analysis of its historic main building. “Based on the results, we will decide whether to renovate it and return, or choose an alternative in Frankfurt.
While acknowledging the impressive scale and distinctive concrete facade of the historical building, Nagel stressed that “it is not the building that defines the Bundesbank, it is the people who work for it”.
