“Probably more monetary easing is going to come, in order to make sure the European economy grows,” he told a conference in Hong Kong on Monday. Without further adjustments to the policy stance, “delivering on our inflation target would be at risk”. 

ECB policymakers are determining how quickly and how far to lower borrowing costs in 2025, after four quarter-point moves last year. While easing is likely to continue in a similar fashion, some officials have said a larger 50 basis-point cut shouldn’t be excluded due to the plethora of risks facing Europe’s stuttering economy.

While data last week revealed that inflation saw an uptick to 2.4% in December, the ECB predicts that consumer-price growth will be at its target later this year. 

The euro-area economy probably only grew 0.7% last year, and ECB forecasts see it accelerating to 1.1% in 2025. The region is being held back by weak output in its top two economies — Germany and France — which are both in political turmoil. 

Threatened tariffs after Donald Trump returns to the White House later this month, add to the uncertainty, and ECB president Christine Lagarde has suggested the European Union might be in a better position if it talks with the US about potential trade levies, instead of immediately imposing countermeasures. 

But speaking at the panel in Asia with Lane on Monday, Finnish Governing Council member Olli Rehn suggested a more muscular approach. 

“If you look at trade policy from an economics perspective, the advice is don’t retaliate, as that makes you even worse off,” he said. But “I would not stay on the ground — just take the beating — if I were a government of the European Union”.

Uploaded by Liza Shireen Koshy