MNI BRIEF: Villeroy: Pragmatism Key To Pace, Size Of ECB Cuts
MNI (LONDON) - Euro zone interest rates will go from restrictive towards neutral in the coming months, Bank of France Governor Francois Villeroy said fRIDAY, adding that "how fast and how far" would be determined on the basis of a "giant pragmatism" and a "data-driven approach."
Villeroy, speaking at an OMFIF event in London, added that euro zone inflation should be sustainably around the ECB's price stability target of 2% by the summer, with services inflation now "receding" and "significant wage deceleration" across the zone.
However, the governor, speaking the day after the ECB cut the key deposit rate by 25bp to 2.75%, sounded a note of caution on growth prospects following the "somewhat disappointing" Q4 GDP numbers released this week, saying the data confirmed that "risks on growth are clearly tilted to the downside." (see MNI ECB WATCH: ECB Cuts By 25BP, Says Rates Still Restrictive )