The governor of the Bank of France believes that rates will rise until the summer despite the improvement in inflation

Inflation is showing the first signs of easing, but everything indicates that the European Central Bank (ECB) will continue to raise interest rates.

The rise in prices in the euro zone moderated in December for the second consecutive month and dropped from double digits to 9.2%.

However, the members of the ECB are already beginning to take positions ahead of the conclave next February.

And the messages that they are launching support for now the perception of the markets that interest rates could reach a level of between 3.5% and 4% this year, from the current 2.5%.

"It would be desirable to reach the correct terminal rate by next summer, but it is too early to say at what level," Bank of France Governor François Villeroy de Galhau said Thursday.

The moderation of prices in the euro zone, and especially in Germany, is taking pressure off the ECB in view of the next meetings.

Even so, the harsh message that the president of the institution, Christine Lagarde, launched before Christmas still weighs heavily on the markets.

"The Governing Council estimates that interest rates will still have to increase significantly at a sustained pace until they reach levels that are sufficiently restrictive to ensure that they return to the 2% objective in a timely manner in the medium term,"' said the Frenchwoman after announce a rise in interest rates of half a point, up to 2.5%.

The markets immediately interpreted that Lagarde indicated at least three increases more than half a point, up to 4%.

This week, for the first time, a member of the Governing Council has dared to set a time horizon for interest rate rises: summer 2023. According to

, Villeroy de Galhau —who considers that the drop in inflation in his country is “encouraging” but “not enough”—he thinks that the price of money should go up until then.

From then on, Villeroy de Galhau is committed to maintaining these rates until the inflationary crisis subsides.

"Then we will be ready to stay at this terminal rate for as long as necessary," he said.

The Frenchman is not the only member of the Council who has spoken out this week.

Martins Kazaks, governor of the Bank of Latvia, the country with the highest inflation in the euro zone (20.7%) also told

that further increases will be decided in the next meetings.

“In the next two meetings I think we can still make some pretty big steps,” Kazaks said, also suggesting that the ECB's moves could wind down as summer rolls around.

At the last meeting, the European monetary authority decided to relax the rate of interest rate rises, leaving them at 2.5%, but raising the tone.

Faced with an economic outlook that is not as bleak as the one expected in autumn, the ECB has decided to put all its efforts into curbing inflation.

And the main lever that it will use is the price of money.

The entity, which has a medium-term goal of 2%, believes that next year there will be second-round effects on companies and workers.

For this reason, he believes that the average price rise in 2023 will be 6.3%, in 2024;

of 3.4% and – this is the key – of 2.3% in 2025. As fears of a strong recession fade, forecasts of a tougher monetary policy grow.