ECB’s Villeroy: June Rate Cut Still Probable; Should Not Overinterpret Wage Data

23 May 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Thursday said that the ECB wage growth data released earlier tin the day should not be exaggerated and that, barring surprises, the first interest rate cut would be in June.

Speaking at the VivaTech Conference in Paris, Villeroy, who heads the Banque de France, said, ‘As we have increased confidence on the inflation front, we are very probably, barring a surprise, going to have a first rate cut in our next Governing Council meeting.’

Wage growth in Europe rose from 4.5% in the last quarter of 2023 to 4.7% in the first quarter of 2024, according to the ECB wage tracker.

The increase was driven by a ‘German exception’ due to one-offs, Villeroy said.

‘We should not overinterpret, we keep confident in the disinflationary process’, he said.