Bank of France Governor Moulin Supports ECB's Inflation Policy

In an interview with the newspaper La Montagne, Bank of France Governor Moulin stated that the European Central Bank has given a measured response to inflation and that prices and wages are stable.

Bank of France Governor Moulin stated in remarks to the newspaper La Montagne that, excluding energy and fresh food, prices have progressed relatively stably and that no impact reflected on wages is observed at this stage. Emphasizing that inflation is largely external in origin, Moulin expressed that the European Central Bank (ECB) has adopted a measured approach in the face of this situation.

At its meeting on Thursday, the ECB refrained from pursuing a third interest rate hike despite the war in Iran driving up energy prices. While officials evaluated the possibility of a rate hike, President Christine Lagarde stated that the direction of future policy is clear. Moulin noted that the ECB will continue to monitor the situation very closely and will take action in upcoming meetings depending on data.

Moulin also opposed the proposal by French far-left presidential candidate Jean-Luc Mélenchon to cancel or freeze government bonds. Stating that such a step would create a deficit on the balance sheet and cause troubles for the Eurozone without providing any benefit to public finances, the official recalled that France has not defaulted on its debt since 1797.