ECB’s Villeroy: Rate Cut More Plausible Than a Rate Hike

14 October 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Tuesday pushed back against those claiming a rate hike could be the ECB’s next move just as easily as a cut.

Villeroy, who heads the Banque de France, told Bloomberg Television: “If there is a next move, a rate cut is more plausible, more likely than a rate hike. I see few risks on the upside [and] more risks on the downside.”

“We are in a good place but I fully agree with Christine Lagarde, our president, that a good place is not a fixed place,” Villeroy said.

Villeroy urged his country to get its government deficit down.

“We have to reach a significant reduction of the fiscal deficit next year,” he said. “Most of the solution belongs to the expenditure side. Part of it could be on the tax side.”

He indicated no intention of vacating his Banque de France position early to facilitate the appointment of a new governor before current French President Emmanuel Macron leaves office, potentially turning power over to a government without respect for central bank independence.

“I don’t see this debate on independence — be it in France or elsewhere in the euro area,” Villeroy said. “I am in my job till 2027. We will see.”