ECB: Uncertainty Now Exceeds that during Pandemic

European Central Bank (ECB) Vice President Luis de Guindos Jurado told The Sunday Times that US President Donald Trump's policies are creating greater uncertainty in the economy than during the Covid pandemic.

"We need to take into account the uncertainty in the current environment, which even exceeds that of the pandemic," he was quoted as saying.

"What we are seeing is that the new US administration is not very willing to continue multilateralism, which is about cooperation across all regions and finding common solutions to common problems. This is a very significant change and a major source of uncertainty."

In recent days, several European Central Bank policymakers have expressed concern about the impact of a looming trade war. Bank President Christine Lagarde said that an escalation of tariff disputes could have a damaging impact on the global economy.

Similarly, Bank of Spain Governor José Luis Escrivá told Bloomberg on Friday that inflation and economic growth assumptions face significant risks in all directions, adding that this uncertainty makes it impossible to predict further interest rate moves.

The eurozone is expected to grow by just 0.9% this year, according to European Central Bank estimates published earlier this month.

"Real wages are rising, inflation is slowing, interest rates are falling, and financing conditions are improving... but despite this, consumption is not actually improving," according to Guindos.