ECB’s Villeroy: June Rate Cut Must Be Followed by Others Until End of 2024

13 April 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Saturday said that the ECB's initial rate cut in June had to be followed by more such steps before the end of 2024.

In an interview with French weekly Le Journal du Dimanche, Villeroy, who heads the Banque de France, said, ‘Our cut at the beginning of June must be followed by other cuts by the end of the year: I plead for pragmatic – according to economic data – and sufficiently agile gradualism.’

Despite having decided to keep its key interest rates unchanged at the Governing Council meeting in April, Villeroy assured that ‘barring any surprises, we should decide on a first reduction at our next meeting on June 6.’

‘We indeed have greater and greater confidence in the disinflation trajectory’, he said.

Even when interest rates were reduced, the ECB would not return to ultra-low or negative rates, he said, those of the 2015-2022 period having been an 'exception'.

With the reduction of inflation in France, 1.5% growth was expected for 2025, he said.

‘The good news is that we are winning the battle against inflation’, he said. ‘Our goal is to bring it down to 2% and we will do so by next year at the latest.’