(Bloomberg) -- The European Central Bank should remain flexible as it cuts interest rates in response to cooling inflation and a weakening economy, according...
-- The European Central Bank should remain flexible as it cuts interest rates in response to cooling inflation and a weakening economy, according to Governing Council member Francois Villeroy de Galhau.Speaking less than a day after policymakers lowered borrowing costs for the third time this year, the Bank of France head cited the current unpredictable nature of geopolitics, as well as now equal risks of over- and under-shooting the 2% inflation goal.
Officials see price gains picking up again in the months ahead before settling at 2% in the first or second quarter of 2025, according to people familiar with the matter. Another cut at the final gathering of the year is highly likely, they said. The slow pace of economic recovery, especially in Germany and France, “confirms the belief that the central bank no longer needs to keep interest rates at their current levels to permanently slow the rise in prices,” Muller said.“Everything points to the process of disinflation being more robust,” he told RTVSLO radio. “We expect inflation to swing slightly upward in the coming months before returning to a gradual downward path again next year.
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