By Scott Kanowsky
Investing.com — ECB must take ‘orderly but firm’ action to restore inflation According to the governor of the Bank of France, Francois Villeroy de Galhau, it was below its long-term target.
In an interview with French commercial radio, Villeroy added that consumer price growth is expected to remain high throughout the period 2023 In 2024 back to before the ECB’s desired 2% rate.
Raising borrowing costs by 75 basis points at the ECB – the largest rate move ever recorded – and underscoring the potential for further rate hikes in the future .
The move is at the top of interest rates ahead of the Governing Council meeting despite concerns that the move could exacerbate the headwinds facing the euro area economy expectations. Many analysts – including the bank’s own chief economist Philip Lane – have warned that a recession in the euro zone is more likely due to the energy crisis triggered by the war in Ukraine and, to a lesser extent, the knock-on effects of the pandemic. come bigger.
Villeroy’s colleagues echoed his views on Friday, with Slovakia’s central bank governor Peter Kazimir calling the unprecedented rate hike “inevitable and correct”, adding that a tighter currency would be needed Policy to fight inflation.
Governing Council member Claes Nott took a similarly hawkish stance, saying Thursday’s rate hike “should do more.” Knot also noted that if left unchecked, soaring prices could “cannibalize” consumption and investment.
