Bank of France Governor François Villeroy de Galhau, a member of the ECB Governing Council, said the European Central Bank is ready to act if needed to anchor inflation expectations, but that discussing dates for any rate move is premature. Villeroy made the comments in an interview with Italy's La Stampa published on 30 March, as the Iran war pushed up energy prices.
Villeroy said the ECB has no control over oil prices, but has the ability and duty to anchor the inflation expectations of households and businesses to its 2% medium-term target. He said the central bank's primary responsibility is preventing second-round effects.
CONDITIONAL READINESS FRAMEWORK
Villeroy said the ECB is not on a predetermined path and its decisions remain tied to the evolution of macroeconomic data. Asked whether a rate move could come as early as April, the Bank of France governor said the debate on pre-established dates 'appears very premature', adding that there had been 'some overinterpretation by financial markets in the latest days'.
Villeroy said that in times of uncertainty it would be 'especially inappropriate' to provide forward guidance on the interest-rate path, and that what matters is a clear commitment to the 2% inflation target.
INFLATION OUTLOOK DETERIORATES
Villeroy warned that the Iran war can inflict a negative supply shock, incurring slower economic growth and faster increases in consumer prices, and said the latest news on the conflict does not bring favourable signals. He said that even in the ECB's most severe scenario growth would slow but remain positive, and that inflation would peak around 2026 and 2027 before returning to the 2% objective.
Villeroy contrasted the situation with 2022, noting that euro-area inflation stood at 1.9% in February 2026, against more than 5% in February 2022.
Villeroy said European citizens and businesses can rely on the ECB's determination to stabilise inflation at 2% over the medium term.
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