ECB’s Luis de Guindos: Oil Prices Won’t Derail Eurozone Inflation Decline

The Vice President of the European Central Bank (ECB), Luis de Guindos, stated that recent commodity price fluctuations due to the conflict between Israel and Iran do not alter the outlook for inflation in the eurozone. “If oil prices increase – but they seem somewhat contained – it is something we need to consider,” Guindos said on Tuesday (June 24, 2025) in Santander, Spain. “But the process by which inflation is decreasing has locked in. As far as we see today, the process hasn’t slipped out of control – not at all.” Officials are satisfied with the trajectory of consumer prices, whose growth has subsided from record highs to levels slightly below the ECB’s target of 2%. While the target remains likely to be sustainably achieved in the coming months, Guindos noted that the situation regarding Iran adds another layer of complexity to a scenario already clouded by global trade tensions. “We believe our mandate for price stability will be fulfilled, always keeping in mind that the level of uncertainty is enormous,” the Spanish official remarked. “It forces us to be particularly cautious.” Following eight interest rate cuts within a year, the ECB declared it is now well-positioned to handle uncertainties in the global economy. Investors anticipate a pause in the easing cycle next month, though they lean toward another cut before the year ends. The head of Slovakia’s central bank, Peter Kazimir, stated that recent days have shown how fragile the prospects for prices are and that “vigilance will remain a top priority.” “I belong to the governors who believe we’ve hit our target, that we’re in the neutral range,” he said today in Bratislava. “Personally, I wouldn’t touch rates until we have a much clearer picture regarding trade war scenarios.”