French ECB policymaker Francois Villeroy de Galhau said today that inflation in the euro zone should stay high next year and should be brought back around 2% by 2024.
Villeroy made the comments to BFM business radio.
The European Central Bank raised its key interest rates by an unprecedented 75 basis points yesterday and promised further hikes, prioritising the fight against inflation even as the bloc is likely heading towards a winter recession and gas rationing.
The Bank of France Governor also said today that the French central bank expected economic growth in France this year to be above the 2.3% increase it is presently projecting.
Meanwhile, Deutsche Bank said today it expected the European Central Bank to deliver another big interest rate increase in October, a day after the ECB delivered a 75 basis point interest rate hike to tame inflation.
"It is likely to be another close call in October and we have shifted our view to expect another 75bp hike (previously: 50bp)," Deutsche Bank analysts said in a note.
They noted guidance from ECB chief Christine Lagarde that rates are "far away" from levels appropriate for getting inflation back to target in a timely fashion and that hikes should be anticipated at the "next several meetings."
"This underscores the ECB's insensitivity to the growth headwinds and laser focus on bringing inflation down," the Deutsche note said.
