Policy rate stays at 2.5 percent as energy inflation rises
Gabriel Makhlouf supported holding the European Central Bank (ECB) deposit facility rate at 2.5 percent but also considered an increase. He cited policy transmission lags and tighter financing conditions as reasons to await December projections.
Energy rises as financing tightens
Euro area inflation reached 3.8 percent in September, its highest since 2023; core inflation rose to 2.5 percent.
Makhlouf said price pressures remained concentrated in energy, indirect effects were not intensifying and wage growth remained contained.
The 50 basis points of tightening delivered in June and September were still transmitting, while higher long-term yields tightened financing conditions.
He warned that further increases risked growth costs, while prolonged Persian Gulf conflict risked persistent inflation.
December projections will inform the balance; decisions remain meeting-by-meeting, with no committed rate path.
The medium-term target remains 2 percent.
Christine Lagarde intends to step down as ECB President in February.
Ireland feels imported energy costs
Irish September HICP inflation was 3.8 percent, with energy up over 15 percent annually.
Inflation excluding food and energy was 3.1 percent; services and goods inflation were around 4.1 and 0.9 percent.
Frequent purchases, just under half the basket in most countries, cost 3.1 percent more annually and 28 percent more than in 2019.
Advertised wages showed no substantial increases ahead of inflation, but wage-setting lags warranted monitoring.
The Central Bank of Ireland will publish DP12 tokenisation feedback next week and participates in Eurosystem projects Pontes and Appia.
Resilience does not remove vulnerabilities
Makhlouf said the International Monetary Fund meetings in Bangkok exposed limits to global resilience.
He cited AI corrections, sovereign yields, cyber risks and leveraged hedge funds as stability concerns.
His position leaves further rate action open rather than treating the hold as an endpoint.