Villeroy: ECB May Need to Adjust Interest Rates to Stimulate Growth

According to ECB Governing Council member Francois Villeroy de Galhau, the European Central Bank no longer needs to restrict the economy and may even need to lower interest rates to levels that encourage growth. Villeroy stated that while it is too early to say where borrowing costs will settle, there is a "significant space" to ease before putting pressure on production. He emphasized that another cut in December is almost certain and that officials should keep all options open regarding the pace and magnitude of future cuts. Villeroy remarked, "I believe there is no reason for our monetary policy to remain restrictive, given that we need to be sustainably at 2% inflation in the near future and that there is still a weak growth outlook in Europe."