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ECB May Consider Interest Rate Cut Next Year, Villeroy Says

2023-12-01 23:16
The European Central Bank isn’t ready to consider lowering borrowing costs now, but will examine the question at
ECB May Consider Interest Rate Cut Next Year, Villeroy Says

The European Central Bank isn’t ready to consider lowering borrowing costs now, but will examine the question at some point during 2024, Bank of France Governor Francois Villeroy de Galhau said.

“Barring any shock, rate hikes are now over,” Villeroy said at a conference near Paris. “The question of a cut may arise when the time comes during 2024, but not now: when a remedy is effective, you have to be patient enough on its duration.”

Villeroy said that euro-zone data on Thursday, showing a marked slowdown in consumer-price growth, shows that the process of disinflation “is even faster than expected,” notably in services, according to the comments provided by the Bank of France.

“There might be a few months of pause, but it supports our forecast for a return of inflation toward 2% by 2025 at the latest, barring external shocks,” he said.