The European Central Bank (ECB) is under no pressure to cut interest rates further to achieve stable inflation, according to governing council member and Central Bank of Cyprus (CBC) governor Christodoulos Patsalides.

“The present interest rates are appropriate if inflation develops as projected,” he told Bloomberg.

“So unless there’s any other significant development, there’s no need to take action soon,” he added.

The ECB kept its deposit rate unchanged at 2 per cent for the second straight meeting, with president Christine Lagarde noting that inflation is now “where we want it to be”.

Patsalides said risks to the outlook are balanced and stressed that the next move in rates could be up if needed.

“Risks are balanced, so this means interest rates could go either way next,” he said, adding that “I wouldn’t like to exclude a rise in interest rates if the need arises.”

He pointed to global uncertainties, including US trade tensions under president Donald Trump, which could either dampen demand or push up prices through supply chain pressures.

What is more, Patsalides said that the ECB’s forecasts show only a short-term deviation from its inflation goal.

“In 2026 we’re expecting a short-term deviation from our 2 per cent target, but we’re back to 1.9 per cent in 2027,” he stated.

He also downplayed the slight downgrade from the previous projection, saying it was due to technical assumptions rather than fundamental changes.

“Economics is not an exact science,” Patsalides said.

“The change was due to technical assumptions, like the exchange rate, as opposed to something fundamental,” he concluded.