France's central banker expects further rate cuts in eurozone amid weaker inflation risks

The European Central Bank (ECB) Governing Council member and head of the French financial regulator Francois Villeroy de Galhau says that interest rates in Europe will decline further this year. In his opinion, there are no inflation risks in the region now. This will allow the ECB to continue reducing borrowing costs.

Villeroy de Galhau noted the uncertainty surrounding the impact of the new US tariffs on the pace of consumer price growth in Europe. However, he believes that in general, it may more likely lead to their slowdown.

In addition, as the official emphasized, the significant deceleration of wage growth in Europe is another evidence of reduced inflationary risks.

Last week, the ECB cut borrowing costs for the seventh time since June 2024 amid escalating global trade tensions that threaten to undermine the region's economic recovery. Villeroy de Galhau welcomed the decision.

However, he said Europe still needs to stay focused on overcoming structural hurdles to stronger economic growth as well. Among the goals, he mentioned closer integration of the bloc's economies.