ECB’s decision on the interest rate should be “orderly and predictable”

The European Central Bank is expected to decide on the interest rate in September. Measures to stabilize the economic environment must be "orderly and predictable", French ECB head Francois Villeroy de Galhau stated on Wednesday. 

Inflation in the Eurozone hit a record high. Politicians are concerned about this fact, since the level may exceed the bank's target of 2% . 

Next meeting of the ECB is about to set a new hike in interest rate. The stock market is forecasting a 50 or 75 basis-point increase. 

“We will determine a second rate hike next week, following the first one in July. Decisive but also orderly and predictable steps are needed for the European economy” mentioned Villeroy de Galo in an interview.

A jump in inflation, initially caused by skyrocketing energy prices, has had an adverse effect on the economy as a whole. The service sector has also suffered greatly. However, the formation process of the wage-price spiral is not observed.

Despite rising energy costs, Villeroy de Galo dismissed a recession in Europe for 2022. But the chances for its onset next year are rather high.