ECB Governing Council member Francois Villeroy de Galhau indicated that the central bank will not pursue further interest rate hikes. In an interview with the French newspaper La Depeche du Midi, Villeroy stated, “Our decisions to increase interest rates are fully playing their role as a remedy against the disease that is inflation.”
He added, “This is why, barring any shock, there will be no further increase in our rates — the question of a reduction may arise in 2024, but not now.”
Villeroy expressed confidence in the progress made in the fight against inflation, noting that “we are well on our way… even if we are not yet finished.” He urged patience with the duration of these measures, reiterating the ECB’s commitment to bringing inflation back toward 2% by 2025 at the latest.
Furthermore, he pointed out that disinflation is occurring faster than anticipated due to two main factors: slowdown in energy prices, unaffected by conflicts in the Middle East, and deceleration of other prices, including services and manufactured products, as a result of ECB’s monetary policy.
