“Easy Does It — ECB Can Continue Gradual Cuts in December, Says Croatia’s Vujčić”

Vujčić delivered a firm rebuttal to any speculation about significant disagreements among members of the European Central Bank’s (ECB) Governing Council regarding a potential large-scale interest rate cut. “I saw the Governing Council being on the same page, and I don’t really believe that it will be much different in the coming meetings,” he stated confidently.

The ECB’s primary deposit rate currently sits at 3.25 percent, following three reductions of 0.25 percentage points each earlier this year.

However, Vujčić acknowledged that discussions within the ECB could become more contentious as its monetary policy shifts toward a more accommodative stance.

So far, most economic indicators since the ECB’s policy decision in October have aligned closely with the Bank’s official projections. The main outlier has been eurozone inflation, which climbed to 2.3 percent year-on-year in November. Vujčić attributed this to the fading influence of past elevated energy prices in the computation.

On the topic of services inflation, which remains persistently high due to ongoing wage growth, Vujčić anticipated that the ECB’s updated forecasts—set to be released next week—will likely predict a significant decline in this metric by 2025.

Strengthening Confidence

The ECB is also grappling with internal debates over how to best manage longer-term policy expectations amid a politically uncertain climate. Offering clearer forward guidance could theoretically boost consumer and business confidence. Governing Council members Fabio Panetta and Olli Rehn have expressed support for this approach, but not all members are convinced of its merits.