ECB Villeroy says Bank will quite probably cut rates in October, inflation undershoot risk

European Central Bank Governing Council policymaker and French central bank governor François Villeroy de Galhau, in an interview with an Italian newspaper, La Repubblica.

• ECB will probably cut interest rates on October 17
• economic growth is
  weak, bringing the risk that inflation will undershoot its
  2% target
• “In the last two years our main risk was to overshoot our 2%
  target, now we must
  also pay attention to the opposite risk, of undershooting our
  objective due to a weak growth and a restrictive monetary policy
  for too long.”

Villeroy expects the Bank will cut further next year

• ECB should be back at the “neutral” rate sometime in 2025
• “If we are next year sustainably at 2% inflation, and with
  still a sluggish growth outlook in Europe, there won’t be any
  reason for our monetary policy to remain restrictive, and our
  rates to be above the neutral rate of interest”

This article was written by Eamonn Sheridan at www.forexlive.com.