ECB policymakers promise more hikes to beat inflation

The European Central Bank will continue raising interest rates until inflation is under control, two ECB policymakers said on Friday as surveys showed the fight against rising prices was far from over.

French central bank governor Francois Villeroy De Galhau and his Lithuanian peer Gediminas Simkus reaffirmed the ECB’s intention to further increase borrowing costs, multiple times if needed, which financial markets are still doubting.

“The essence of the effort has been done, although there will probably be a few more rate hikes,” Villeroy told French broadcaster Radio Classique.

The central bank for the 20 countries that use the euro hiked its key deposit rate on Thursday for the seventh consecutive time but the 25 basis point rise was smaller than previous increases.

Money market prices showed investors were putting a high likelihood on another 25 bp increase in the deposit rate next month, which would take it to 3.50%, but were less convinced the ECB would hike again after that.

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