In an interview with Le Figaro, ECB Governing Council member Francois Villeroy de Galhau revealed a “very broad agreement” within the council to initiate rate cuts in spring, with lasts until end of June.
Villeroy, who also serves as Governor of Bank of France, expressed optimism that “we’re winning the battle against inflation”. The bank lowered core inflation forecast for 2024 from 2.8% to 2.4%. This revision aligns with more moderate wage increases, with average salaries expected to rise by 3.2%, down from the previously predicted 4.1%.
On the growth front, Bank of France downgraded its 2024 growth projections slightly from 0.9% to 0.8%, with expectations for an acceleration to 1.5% in 2025 and 1.7% in 2026. Villeroy confidently stated, “France will avoid recession.”
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