European Central Bank policymaker François Villeroy de Galhau stated on Thursday that while an interest rate hike is the most probable next step for the ECB, it is still too early to predict when such a move might occur.
Villeroy, who also serves as the governor of the Bank of France, noted that the recent surge in energy prices is rapidly feeding into overall inflation figures for both the eurozone and France. However, he emphasized that core inflation remains "firmly under control."
Despite this, the ongoing conflict in the Middle East is negatively impacting the economic outlook. Under current circumstances, the situation more closely resembles the ECB's moderately adverse scenario rather than the baseline scenario used in the bank's economic projections last month.
Speaking at Sciences Po in Paris, Villeroy remarked that the ECB's next interest rate adjustment is "very likely to be an increase."
He added, "It is still too early to anticipate the timing of the ECB's rate hike, but we are prepared to act when necessary and in a measured manner."
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