FRANKFURT (Reuters) – The European Central Bank (ECB) has not fallen behind in easing its interest rates but must be vigilant not to stifle economic activity and ensure that inflation does not pass not under its target of 2%, declared Friday from Frankfurt François Villeroy de Galhau.

“We are not ‘behind the curve’ today. The European economy is in the process of achieving a soft landing,” declared the governor of the Bank of France, a member of the ECB Governing Council which will hold its next monetary policy meeting on December 12.

François Villeroy de Galhau notes, however, that risks remain on the outlook and that those responsible for monetary policy should be careful to ensure that rates are not too high for too long.

“We will be attentive to the balance of risks and its symmetry, which includes the possible risk of missing the inflation target from below, and that of putting unnecessary pressure on activity,” added the governor.

Until this Friday, a rate cut of 25 basis points from the ECB was widely expected on December 12, but the latest PMI activity indicators have fueled expectations of an even wider reduction, of 50 basis points.

Inflation in the euro zone for November, the figures for which will be communicated next Friday, could rebound to 2.4% over one year, according to the Reuters consensus, complicating communication around rate cuts.

“We are very confident that we will sustainably achieve our inflation objective of 2%. We could even achieve it more quickly than what we predicted in our September forecasts,” indicated François Villeroy de Galhau.

According to ECB projections, inflation would reach the central bank’s target by the end of 2025.

(Written by Balazs Koranyi, Corentin Chappron, edited by Blandine Hénault)

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