PARIS (Reuters) – The decision taken on Thursday by the European Central Bank (ECB) is consistent with the decline in inflation, which now risks falling below the institution’s objective, François Villeroy de Galhau, governor, said on Friday of the Bank of France.
The ECB lowered its key rates on Thursday for the third time since the start of the year, pointing to inflation in the euro zone that is increasingly under control and a deterioration in the economic outlook.
“The risk of lastingly missing our target [d’inflation] from below now exists as much as that of going beyond it,” François Villeroy de Galhau, member of the Governing Council of the ECB, told journalists.
Inflation should reach the 2% target earlier than expected in 2025, adds the governor, who also considers a rebound in the European economy remote.
“The European economy is experiencing a soft landing, without recession, but without a clear ‘restart’ yet in sight at this stage,” notes François Villeroy de Galhau.
“This is not the first rate cut, and it will not be the last,” adds the governor of the Bank of France, reiterating the importance of a data-driven approach.
“In a very uncertain international environment, we retain full optionality for our next meetings.”
(written by Corentin Chappron, with contributions from Leigh Thomas, edited by Blandine Hénault)
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