Eurozone consumer price inflation will likely reach the European Central Bank’s 2% target by early 2025, according to ECB Governing Council member and head of the Central Bank of France, François Villeroy de Gallo.
“We are on the right track to beat inflation and that is really good news,” he told France Inter radio on Saturday. “There may be some fluctuations in the coming months, but this is a technical result. Barring major external shocks, we will be experiencing 2% inflation next year, probably at the beginning of next year.”
The latest forecast from the ECB – starting in September – predicted that 2% would only be reached in the last quarter of next year.
The central bank has already reduced the cost of the loan three times this year (2 in a row) and the markets are betting on a series of cuts in the coming sessions – starting in December, when some investors estimate that there could be a greater movement of half a point.
“There will probably be more rate cuts,” de Gallo said. “But we will decide according to the data. I’m all for flexible pragmatism: flexible because we need to change and reduce rates when we can. Pragmatism, because we have to look at the data and not look at the tree and miss the forest.”
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