French central bank chief: ECB will cut interest rates due to weak economic growth

Francois Villeroy, the head of the French central bank, believes that the European Central Bank will cut interest rates at its meeting later this month in light of weak economic growth, which increases the risk that inflation will fall below the 2% target.

The ECB has already cut interest rates twice this year, and markets are now expecting faster easing of monetary policy, amid estimates of interest rate cuts in October and December as inflationary pressures have accelerated their decline faster than policymakers expected.

The French central bank governor added, “In the past two years, the main risk we faced was exceeding the 2% inflation target. Now we must also be aware of the opposite risk, which is missing our target due to weak growth and tight monetary policy for too long.”