ECB’s Villeroy says inflation is too strong and too broad

Previous remarks from ECB President Christine Lagarde have indicated an imminent end to bond purchases followed by quarter-point rate hikes in July and September

The Bank of France chief said that even a measure of core inflation -- which strips out the impact of surging prices of food and energy -- is above the ECB’s 2% target after reaching 3.8% in May. Picture: Alex Kraus/Bloomberg

The European Central Bank must pare back stimulus as inflation is too strong and too broad, Governing Council member Francois Villeroy de Galhau said.

In a speech at an economics conference in Paris, the Bank of France chief said that even a measure of core inflation -- which strips out the impact of surging prices of food and energy -- is above the ECB’s 2% target after reaching 3.8% in May. He said the central bank’s meeting next week will be “decisive” in setting out a response.