ECB’s Villeroy: more rate hikes to come

The European Central Bank will continue increasing interest rates until inflation is under control, French ECB policymaker Francois Villeroy de Galhau said on Friday.

“The essence of the effort has been done, although there will probably a few more rate hikes,” Villeroy said on Radio Classique

The European Central Bank hiked its key deposit rate for the seventh consecutive time in a row Thursday albeit slowing the pace of the increase.

Villeroy explained this deceleration of the increase by the fact that higher rates was beginning to have an effect on inflation.

“We see that the impact of the rate hikes has percolated through the economy,” he said, adding that the bank would not let up.

“The duration (of the rate hikes) now is more important than the speed … We will be persistent until inflation is under control,” he said.

He added that the ECB aims to bring inflation back to 2% by 2025, “maybe even by the end of 2024”.

Villeroy said the bank’s goal is to win the fight against inflation without triggering a recession.

“Our target is not to slow the economy but to beat inflation,” he said.
Source: Reuters (Reporting by Benoit Van Overstraeten and GV De Clercq)