ECB will probably keep raising rates beyond 2% level: Villeroy

THE European Central Bank (ECB) will probably continue to raise interest rates beyond 2 per cent, but “jumbo” rate hikes will not become a new habit, France’s central bank chief said in a speech in Tokyo on Tuesday.

The ECB has increased rates at its fastest pace on record recently, hiking them by a combined 200 basis points to 1.5 per cent in just three months.

“We are clearly approaching what I would call the ‘normalisation range’ which can be estimated at around 2 per cent. We should reach this level by December,” French central bank Governor Francois Villeroy de Galhau said in the speech.

“Beyond this level, we will probably continue to raise rates, but we may do so in a more flexible and possibly less rapid manner. Jumbo rate hikes will not become a new habit.” REUTERS