The European Central Bank is in no hurry to raise interest rates despite the surge in energy prices caused by the war in Iran, François Villeroy de Galhau, Bank of France governor and member of the ECB governing council, said at Semafor World Economy in Washington, DC.
“We shall have no hesitation to act if and when necessary, but there is no rush,” he said Wednesday. “There is no predetermined calendar. A focus on April would be premature.”
Before acting, the central bank must have a “critical mass of data” on the impact of the energy shock on two fronts, he said: underlying inflation and economic growth. “Headline inflation increased significantly in March, but underlying reinflation remained limited at 2.3%,” he said.
Villeroy said in early April that the ECB’s next move was likely to be a rate increase but that a decision on timing depended on events in the Middle East.
The ECB last month left interest rates unchanged.