ECB to do whatever it takes to slash inflation - Villeroy

Tuesday, 04. October 2022 14:28

European Central Bank Governing Council member and Bank of France Governor Francois Villeroy de Galhau (pictured) stated on Tuesday that the ECB "will do whatever it takes" to lower core inflation to the 2% target.

Speaking to the Dutch newspaper NRC, he noted that the large discrepancy in the inflation rates between France and the Netherlands comes from "the timing and effectiveness of the fiscal measures that governments are taking to tackle the energy crisis." The latest inflation readings for the Eurozone showed that prices in France rose by only 6.2% year over year in August, compared to 17.1% in the Netherlands.

Villeroy de Galhau also stressed that it is important to determine the neutral rate, which is, according to him, below or close to 2% in the euro area. The ECB should reach that point "without hesitation, by the end of the year," he pointed out, adding that then the bank "can start the second phase, which is a bit more flexible and possibly also a bit slower."

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Author:
Baha Breaking News (BBN) / MS