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.
© 2021 Bloomberg L.P.