ECB Maintains Vigilance, No Secondary Inflation Effects Observed Yet, Says French Central Bank Chief

Deep News03:10

Outgoing European Central Bank Governing Council member Francois Villeroy de Galhau stated that the surge in energy costs has not yet triggered secondary effects in other sectors of the eurozone economy.

"So far, we have not observed this spillover effect, but we remain highly vigilant regarding the risk of rising inflation expectations," he said in an interview. "Households and businesses can trust that we will bring inflation back to 2% over the medium term—and we will not hesitate to act if necessary to achieve this objective."

Villeroy will step down as Governor of the Bank of France in June. This means he will no longer be in office when the ECB's rate-setting body meets in Frankfurt on June 10-11. Markets widely anticipate that the ECB will raise borrowing costs by 25 basis points at that meeting.

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