© Reuters. FILE PHOTO: Francois Villeroy de Galhau, Governor of Banque de France, attends the Paris Europlace International Financial Forum in Paris, France, July 12, 2022. REUTERS/Benoit Tessier
PARIS (Reuters) – Upcoming interest rate hikes will be marginal, said European Central Bank (ECB) member and Bank of France governor Francois Villeroy de Galhau, who added that rate hikes were beginning to have an impact on inflation.
“The increases in interest rates that we still have to do are relatively marginal, most of the work has been done,” said Villeroy, who was speaking at an event hosted by various French media organisations and the Toulouse School of Economics.
Data published earlier on Thursday showed that euro zone inflation had eased by more than expected last month, fuelling a debate about the need for further ECB rate hikes beyond an increase later this month.
Inflation in the 20 nations sharing the euro eased to 6.1% in May from 7.0% in April, below expectations for 6.3% in a Reuters poll of economists.
ECB President Christine Lagarde added on Thursday that euro zone inflation was still too high, so further monetary policy tightening from the ECB was necessary even if there is a growing body of evidence that past rate hikes are staring to work.