(Bloomberg) -- The European Central Bank should continue cutting interest rates as euro-area inflation is likely to reach 2% in the first half of 2025, according to Governing Council member Francois Villeroy de Galhau.
“We have some good news, inflation has slowed and is going toward our target,” he said in Dijon on Friday. “We will therefore probably be able to continue to lower interest rates.”
Speaking hours after data revealed that euro-area inflation accelerated to 2.3% in November, the French central banker said that “in our projections — beyond monthly variations — we are confident that we will reach our target next year, and probably in the first half of next year. ”
The ECB is widely expected to reduce borrowing cuts for a fourth time at its meeting next month. What happens beyond that is unclear, as geopolitical uncertainty clouds the outlook.
“Some of you say ‘we should go faster,’ others say ‘no, we need to be prudent’,” Villeroy said. “I am among those who say we have to continue lowering rates and we will see exactly at what rhythm in the coming months.”
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