Wednesday, October 20

ECB’s Villeroy Says Inflation to Fall Below 2% by End-2022

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By Alan Katz

(Bloomberg) —

Bank of France Governor Francois Villeroy de Galhau said he expects inflation in the euro area to peak in coming months and for price increases to fall below 2% by the end of 2022.

Villeory, who is also a member of the European Central Bank’s governing council, said the jump in inflation was a temporary bump linked to the rise in energy prices and a few other areas, and that business leaders were already telling him of declines prices in some commodities.

“A bump, even if it’s high, doesn’t make for a long term trend,” Villeroy said in an interview on France Inter radio. “I don’t think it’s start of a spiral, even if we need to remain very vigilant .”

Villeroy also dismissed a question about whether the ECB should consider raising rates, saying that the first error one can make in monetary policy would be to overreact to a temporary variation in prices.

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