PARIS (Reuters) – The state of the French economy and the deceleration of inflation “fully” justify the end of the cycle of raising interest rates by the European Central Bank (ECB), the governor said on Tuesday of the Bank of France, François Villeroy de Galhau.
According to preliminary data published Tuesday by INSEE, France’s gross domestic product (GDP) increased by 0.1% in the third quarter and inflation slowed to 4% in October.
“The French economy, although slowing, showed a certain resilience in the third quarter,” writes François Villeroy de Galhau on the LinkedIn platform, adding that underlying inflation has “clearly passed its spring peak.”
“This state of the economy fully justifies the end of the sequence of rate increases decided by the Governing Council last Thursday,” continues the central banker.
The ECB opted last week for the status quo, keeping its deposit rate unchanged at 4%, after ten consecutive increases in its key rates.
“Our monetary policy must now be guided by confidence and patience: confidence that we are resolutely moving forward on the path to inflation brought back towards 2% by 2025; patience therefore on the stabilization of interest rates at their current level, for a time still necessary for their full effectiveness”, declares François Villeroy de Galhau.
(Written by Blandine Hénault)
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