ECB’s Villeroy: Without Doubt Coming Back to New Inflation Regime Closer to Our Target

23 January 2022

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Saturday said that the ECB intended to gradually modify its policy stance to make sure that inflation slows to a steady level in line with price stability.

Interviewed on French television station Public Sénat, Villeroy, who heads Banque de France, said, ‘We are without doubt coming back to a new inflation regime closer to our 2% target.’

However, he qualified, the forecast was ‘the best we can make today’ and ‘not a blind certainty.’

‘We have our eyes wide open at all times to the real economic data and the dialogue with entrepreneurs and economic players’, he said. ‘And if inflation were to become more persistent, have no doubt about our ability, our willingness to act to bring inflation back to around our 2% target on a sustainable basis. This is a very important guarantee that I am giving to the French, that we are collectively giving to European actors.’

The current inflation hump ‘has been a little bit higher and a little bit longer than what we were anticipating last spring, but, again, that's everybody's expectation’, he said.

‘What we see today, as do most forecasts, is that inflation should gradually decline over the course of this year, because energy prices are stabilising and supply difficulties should diminish’, he added. ‘And so in our central forecast, inflation in France should come down to below 2% by the end of this year.’