ECB’s Villeroy Says Makes Sense to Cut Rates to 2% by Summer

The European Central Bank should continue to cut interest rates to reach 2% by the summer as the battle against inflation is practically won, Governing Council member Francois Villeroy de Galhau said.

The French central bank chief said the neutral rate — a theoretical level that neither stimulates nor restricts the economy — is around 2% for the euro area, while the ECB’s deposit rate is currently at 3% even after three consecutive cuts of 25 basis points.