The Banque de France’s prescription for combating inflation

Each year, the Governor of the Banque de France sends his letter to the Head of State. A republican tradition since 1945. For the second consecutive year, François Villeroy de Galhau, unsurprisingly, chose inflation as his theme, the “primary concern of the French” and “the primary mission of the Central Bank”. The letter displays a will summed up in its title: “How France and Europe will fight inflation”, an “economic and social disease”.

This was first fueled by shocks to energy and agricultural products, which continue to experience the “strongest” increases. But these two positions are “neither the most important nor the most durable”, he underlines. Over the months, inflation spread to all goods and services. “Inflation excluding energy and food” reached 4.6% in France and is likely to be more persistent, he warns. This is where our vigilance is strongest”.