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ECB to start raising rates gradually this summer – Villeroy
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PARIS (Reuters) -The European Central Bank (ECB) will start raising rates gradually this summer, ECB member and Bank of France head Francois Villeroy de Galhau said on Wednesday.
Several ECB policymakers have argued for a rate hike in July to counter rising inflation, which soared to a record high of 7.5% in the 19-nation euro currency zone last month.
“I think that from this summer onwards, the ECB will gradually raise its interest rates,” Villeroy de Galhau told France Inter radio.
He said he expected inflation to remain “high” for the rest of 2022 but added that inflation should get back down to around the 2% level by 2024.
Germany’s Bundesbank chief, Joachim Nagel, said earlier this week that the ECB should raise interest rates in July to stop high inflation becoming entrenched, joining an already long line of policymakers calling for quick rate moves.
Madis Müller, Estonia’s central bank governor, said the ECB could outline its rate expectations for the coming months at its June 9 meeting.
(Reporting by Benoit Van Overstraeten and Sudip Kar-Gupta; Editing by Andrew Heavens)
The European Central Bank (ECB) is the central bank for the eurozone, responsible for monetary policy, including setting interest rates and controlling inflation.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Interest rates are the cost of borrowing money, expressed as a percentage of the amount borrowed, influencing economic activity.
Monetary policy involves the management of money supply and interest rates by central banks to achieve macroeconomic objectives like controlling inflation.
The eurozone is a group of European Union countries that have adopted the euro as their official currency.
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