ECB officials expect trade tensions to have extremely negative impact on European economic growth

Tensions created by the United States trade policy may have only a short-term impact on inflation in the eurozone. However, its effects will be much more damaging to the region's economic growth. This opinion was expressed on Thursday by Luis de Guindos, Vice President of the European Central Bank (ECB).

As Reuters notes, the eurozone economy growth over the past two years has stalled at levels just slightly above zero.

According to de Guindos, amid all the current uncertainty, the ECB needs to proceed with changes in monetary policy with special caution and prudence. Previously, many officials of the European financial regulator have supported an idea of further interest rate cuts, including ECB board member Piero Cipollone, Greek Central Bank chief Yannis Stournaras, and the head of the French regulator.

However, de Guindos maintains a more cautious stance. He emphasized the rationality of the approach chosen by the central bank, which implies making decisions specifically at each meeting, considering the latest economic data in the region.

The next ECB meeting will be held on April 17. According to Reuters estimates, the probability of another rate cut is around 70%.