ECB’s Villeroy: On Inflation, ‘Vigilant Without Being Worried’

14 September 2021

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said Tuesday that the attitude towards inflation was one of vigilance but not worry.

In an interview with French television news show Télématin, Villeroy, who heads Banque de France, described the French economy as having remounted ‘pretty much all’ the stairs it had fallen down due to the pandemic and had done so a ‘little faster than expected’.

‘[W]e will be back to the pre-Covid starting point by the end of this year, which is more than we had hoped for so far’, he said.

France has left behind the ‘main direct effects of the crisis’ and is ‘back to more or less where we started’, he said, looking forward to 6.3% growth this year and possibly ‘a little under’ 4% next.

The ‘number one problem’ facing France was high unemployment alongside recruitment difficulties, he said.

As for currently elevated inflation, ‘We think that this is a temporary surge and that inflation will return to below 2% … as early as next year’, he said. ‘But we are paying attention … one is vigilant without being worried.’