By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Wednesday that he does not think the ECB needs to raise interest rates at its next meeting, though it remains determined to prevent inflation from becoming entrenched.

In an interview with French radio RTL, Villeroy, who heads the Banque de France, said the ECB had been “extremely attentive” to the situation in the Middle East.

However, the said the ECB “must remain calm” and “obviously not give in to haste.”

“So, the direction of this crisis is unfortunately clearer as the days go by,” he said. “Economically, that means a little more inflation and a little less growth.”

Villeroy said inflation in France could rise “slightly” following recent developments, but added that it would not climb to 2% or 2.5%, stressing that inflation in France “will remain low.”

Addressing concerns about economic stagnation, he said growth would continue and that France was “not in an economic crisis if you understand that as a recession.”

Growth would remain positive and inflation was not spiraling out of control, he said.

He also noted that the current situation differs from the inflation shock of 2022, when “all the prices of raw materials had risen,” whereas today pressures were “concentrated on energy, namely oil and gas.”

“We have a meeting of the Governing Council meeting next week. Given the situation today, I do not believe that we must raise rates now,” he said. “But we will not let inflation settle in.”

 

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