MNI BRIEF: ECB Villeroy: Confident EZ On Path To 2% Inflation

Slowing prices and economic growth vindicate the decision of the ECB to keep rates on hold at its October meeting and the Governing Council can be confident that it will reduce inflation to its 2% target by 2025, Bank of France Governor Francois Villeroy said Tuesday.

But the ECB needs to be patient also in keeping rates at their current level for a period of time that would ensure their “full effectiveness.” In a post on Linkedin, Villeroy said that the latest data -- which showed euro zone inflation at an annual 2.9% in October and underlying price rises at 4.2% -- “were a strong sign of the effectiveness of monetary policy”.

Villeroy also noted slowing growth in France in Q3, albeit with clear growth in consumption and investment.

“Our monetary policy must now be guided by confidence and patience: confidence that we are resolutely moving forward on the path to inflation reduced to 2% by 2025; patience therefore on the stabilization of interest rates at their current level, for a period still necessary for their full effectiveness”.