The ECB did not change interest in July, with this new decision, the series of earlier interest rates seems to have come to an end. “Inflation is currently around the medium -term period of 2 percent and the assessment of the inflation views by the board is broadly unchanged,” the ECB writes.
Prices in the Netherlands have been increasing faster for 25 years than in the rest of Europe: ‘Sneak killer for purchasing power and pension’
To combat inflation, the interest was initially increased in a short time. In mid -2022, interest rates were still negative and in more than a year it was raised to 4 percent. Since the summer of 2024, the ECB has reduced to 2 percent, because the central bank believed that inflation had been sufficiently challenged.
The ECB mainly looks at inflation in the eurozone. In August it was 2.1 percent on average for the euro countries. This means that it is close to the objective of 2 percent.
“The ECB is laving between geopolitical uncertainty, the vulnerability of high-debt countries such as France and the need for tighter policy in Northern Europe,” responds Thomas van Galen, main strategist at Achmea Investment Management. “By keeping the interest rate the bank, the bank buys time – but the structural tensions will continue to exist within the eurozone.”
Dutch inflation
The Netherlands has been struggling with higher inflation for a long time than average in the euro countries. In August the average price increase in our country was still 2.8 percent. An analysis by Achmea IM shows that since the start of the euro, Dutch inflation is on average half a percentage point higher than in the euro zone. For the Netherlands, the current ECB interest rate is actually a full percentage point too high, according to this analysis.
Martin Visser: Europe does not help us get rid of our stubborn inflation
“The Netherlands is struggling with inflation, rising house prices and a tight labor market, while France needs space for growth. This makes one uniform interest policy increasingly difficult,” says Van Galen.
The ECB expects that inflation in the eurozone will be 2.1 percent this year, the Central Bank announced on Thursday. Next year it should be 1.7 percent and in 2027 inflation is then 1.9 percent. The growth in the economy of the euro countries is higher for this year than before, namely 1.2 percent. In the coming year, growth by 1 percent will be slightly lower than previously estimated.
United States
In the United States, the pressure on the Federal Reserve is just in order to reduce interest rates. President Donald Trump wants the central bank to encourage the American economy with a lower interest rate.