ECB’s Villeroy intends to raise interest rates by 50 basis points in order to fight inflation

Francois Villeroy de Galhau, Governing Council member of the European Central Bank (ECB) and Governor of the Bank of France, stated that there is a need to raise interest rates by 50 basis points in order to curb the growth of consumer prices. He also noted that a potential peak of inflation is likely to occur in the first half of 2023.

In his recent interview to LCI, Villeroy said that he considered it necessary to raise rates up to 2%, or by 50 basis points. Earlier, the rates were increased by 75 basis points. Thus, Villeroy has confirmed expectations of a possible slowdown in the pace of rate hikes. According to him, the process of beating inflation will be quite long-term, and it might take about two or three more years to fully control the prices.

The ECB’s final decision will be made at its next meeting on December 15. Markets anticipate a 50-basis-point rate hike. However, the possibility of a greater increase isn’t excluded.