Match against inflation is not over By Reuters

© 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) – European Central Bank (ECB) member and Bank of France head Francois Villeroy de Galhau said on Friday the fight against inflation wasn’t over, adding it should peak during the first half of 2023 before easing.

“We finished the first half (of the match), but the match is not over,” Villeroy told BFM Business radio.

“We are committed to bring inflation back to 2% by the end of 2024, end 2025,” he added.

Villeroy reiterated that inflation should peak some time during the first half of 2023 before going down and that the European economy should escape a hard landing next year.

On Thursday, the ECB eased the pace of its interest rate hikes but stressed significant tightening remained ahead and laid out plans to drain cash from the financial system as part of a dogged fight against runaway inflation.

The ECB, shadowing similar steps this week by the U.S. Federal Reserve and Bank of England, raised the rate it pays on bank deposits by 50 basis points to 2%.

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