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Banque de France Sees Slight Inflation Uptick, Slower Growth From Mideast War

Villeroy de Galhau signaled no need for an immediate ECB rate increase.

le gouverneur de la Banque de France François Villeroy-de-Galhau

Overview

  • The governor said inflation in France will remain low and dismissed talk of stagflation.
  • He judged an ECB policy-rate hike unnecessary at this stage, with the Governing Council meeting next week.
  • He cited oil prices as "incredibly volatile" over the past ten days, complicating the outlook.
  • He stressed that the economic impact depends on how long the conflict between Iran, Israel and the United States lasts.
  • The central bank projected about 1% growth for 2026 in February and will publish updated forecasts on March 25.