BRIEF: ECB's Villeroy-Rates Will Not Rise Without New Shock

The European Central Bank will not raise rates further in this cycle barring some new “shock”, Bank of France Governor Francois Villeroy said on Thursday.

Inflation is showing a clear downwards trend although there could be ups and downs in the rate of price increases in the short term, Villeroy told France’s Radio Classique.

While oil prices could be a concern, they too have been declining in recent days, he noted, and food prices are also starting to fall.

Pressed on his recent comments that rates would need to stay high for some time and the potential hit to economic activity, Villeroy replied, “Inflation is the illness. High interest rates are not nice, but they are effective.”

“We are going to bring inflation down to 2% by 2025. That is a very important commitment," he said, in remarks which stood in contrast to comments by the central banks of Ireland and Belgium on Wednesday.