PARIS – The latest increases in inflation make the exit from exceptional monetary policy measures all the more necessary, Bank of France Governor Francois Villeroy de Galhau said on Tuesday.
French inflation rose more than private economists had expected in May to a new record of 5.8%, preliminary EU-harmonised data showed earlier on Tuesday.
“The latest inflation figures for May in France and other countries confirm the increase we expected and the need for a progressive but resolute monetary policy normalisation,” Villeroy said in a speech at France’s ACPR financial regulator, which he also heads.
Villeroy added that a decision on normalisation would be taken at the European Central Bank’s governing council next week and that rising interest rates should benefit the profitability and net margins of French banks.
(Reporting by Leigh Thomas)