Speech by Luis de Guindos, Vice-President of the ECB, at the 15th edition of Spain Investors Day

Madrid, 15 January 2025

It is a pleasure to speak here again this year.^[1] In my remarks last year, I expanded on monetary policy in the face of high inflation risks. The outlook was then still being shaped by the easing of pandemic-related supply constraints and by the energy price shock. Inflation had fallen rapidly from its peak in autumn 2022, but we needed to keep monetary policy sufficiently restrictive to ensure a timely and sustainable return of inflation to our 2% target.

Today, the euro area is in a very different place. Having cut interest rates four times since last June, by a total of 100 basis points, we have made substantial progress in bringing inflation back to target. At the same time, the balance of macroeconomic risks has shifted from concerns about high inflation to concerns about low growth. The outlook is clouded by even higher uncertainty, driven by potential…