Inflation Still Not Defeated, Reports Reuters

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BERLIN (Reuters) – Austrian central bank Governor Robert Holzmann advised the European Central Bank (ECB) to exercise caution regarding future interest rate cuts, noting that inflation has not yet been fully addressed. In an interview with Sueddeutsche Zeitung published on Monday, he stated, "Inflation is on the right track. But it has not been defeated." Holzmann emphasized that while he supported the recent interest rate cut, it should not be assumed that additional cuts will necessarily follow.

Holzmann was the only dissenting member of the ECB’s 26-member Governing Council during its June rate cut decision. He pointed out that when examining core inflation—excluding the more volatile energy and food prices—the outlook remains concerning.

In September, euro zone headline inflation fell below 2% for the first time since mid-2021, which bolstered the argument for an ECB rate cut this month as efforts to control surging prices approach their conclusion. Nevertheless, underlying inflation rates still stood at 2.7%, down slightly from 2.8%.