ECB’s Villeroy Urges Caution and Readiness on Rate Hikes

The European Central Bank must be both cautious and ready to act on interest rates should inflation spread beyond a surge in oil prices, outgoing Governing Council member Francois Villeroy de Galhau said.

Before any tightening of monetary policy, the Bank of France chief said a “critical mass” of data is required regarding core inflation, wages and business and consumer expectations of price increases. He also said the ECB should consider the possibility that weaker demand and economic growth will ease inflation pressure.