ECB’s Sleijpen: Repeat of 2022 Inflation Crisis ‘Less Likely’ as Price Pressures Cool

The European Central Bank’s Executive Board member Olaf Sleijpen has offered a measured assessment of the eurozone’s inflation trajectory, stating that a repeat of the severe price spikes seen in 2022 now appears ‘less likely.’ Speaking in an interview published earlier this week, Sleijpen pointed to cooling energy costs, easing supply chain bottlenecks, and the ECB’s own tightening cycle as key factors reducing the risk of a renewed inflation crisis.

Sleijpen’s Key Arguments

Sleijpen emphasized that the economic environment has shifted significantly since the post-pandemic surge and the energy price shock triggered by geopolitical tensions. ‘The combination of factors that drove inflation above 10% in 2022 is not present today,’ he said. He noted that wage growth, while still elevated, is beginning to moderate, and that corporate profit margins are absorbing some cost pressures rather than passing them entirely to consumers. The ECB has held its key deposit rate at 3.25% since March 2025, after a series of cuts from the 4% peak reached in late 2024.

Market and Policy Context

The comments come as financial markets remain sensitive to any signals about the ECB’s next moves. Investors have been pricing in a possible further rate cut in the second half of 2025, though Sleijpen stopped short of endorsing that view. ‘We need to see inflation sustainably returning to our 2% target before declaring victory,’ he cautioned. Eurozone headline inflation stood at 2.3% in April 2025, down from 2.6% in March, but core inflation—excluding energy and food—remains sticky at 2.9%.

What This Means for Borrowers and Savers

For households and businesses, Sleijpen’s assessment suggests that borrowing costs may have peaked, but rapid relief is not guaranteed. Mortgage rates in the eurozone, which tracked the ECB’s rate hikes, have stabilized but remain elevated compared to pre-2022 levels. Savers, meanwhile, continue to benefit from higher deposit rates offered by banks, though those rates are also expected to decline if the ECB cuts further.

Conclusion

Sleijpen’s remarks represent the most senior ECB official to publicly downplay the risk of a 2022-style inflation repeat in recent weeks. While the outlook has improved, the ECB remains data-dependent and cautious. The next policy decision is scheduled for June 12, 2025, where the Governing Council will update its macroeconomic projections. For now, the central bank’s message is one of guarded optimism—not complacency.

FAQs

Q1: What did ECB’s Sleijpen say about inflation?
He stated that a repeat of the severe inflation crisis of 2022 is now ‘less likely’ due to cooling energy prices, eased supply chains, and the ECB’s previous rate hikes.

Q2: Is the ECB planning to cut interest rates soon?
Sleijpen did not signal an imminent cut. He emphasized that inflation must sustainably return to the 2% target before further easing, though markets are pricing in a possible cut later in 2025.

Q3: How does this affect eurozone consumers?
Borrowing costs may have peaked, but rapid reductions are unlikely. Mortgage rates remain elevated, while savers still earn higher returns on deposits, though those rates may decline if the ECB cuts again.