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France’s Villeroy Urges Targeted Action on Inflation From Macron

  • Central bank ultimately more potent on prices, governor says
  • Villeroy writes to Macron as government prepares new measures
Customers dine on the terraces of bars and restaurants lining a pedestrianized street in Bordeaux, France.

Customers dine on the terraces of bars and restaurants lining a pedestrianized street in Bordeaux, France.

Photographer: Cyril Marcilhacy/Bloomberg

The head of France’s central bank urged President Emmanuel Macron to fight record inflation in a targeted manner, saying higher interest rates are the primary tool and don’t necessarily have to plunge the economy into a recession.

In his annual letter to the French leader, Francois Villeroy de Galhau said the debt burden would increase if fiscal aid enacted this year persists for a long period. Distortions from subsidized electricity and natural-gas prices also risk hampering necessary changes in consumer behavior and energy consumption, he warned.