French inflation is under control and markets do not expect a sharp rise in interest rates in the coming months because it is unnecessary, French Finance Minister Thierry Breton said in an interview released on Sunday.
Breton also told the La Tribune business daily that state statistics body Insee expected 200,000 new jobs to be created this year but said that he believed the economy would do better than that. "Inflation is under control in France. The trend is even downwards. There are no second round effects linked to the rise in oil prices," Breton said in remarks released ahead of publication on Monday.
"In this context, we remain very vigilant, within Eurogroup, that European public policy does not handicap growth. We speak about this regularly with the ECB.
"I note that the markets do not expect a sharp rise in rates in the coming months because quite simply it is not necessary," he added.
French data on Friday showed July consumer prices fell 0.2 percent from the previous month, with the annual rate unchanged from June at 2.2 percent.
In a newspaper interview on Friday, Breton said the euro was fully valued and that European policies must not strengthen the currency. That could penalise exporters just as overseas sales were performing strongly.
The French economy powered ahead in the second quarter, outpacing forecasts to grow by 1.1-1.2 percent, the strongest quarterly rise in six years.
Breton said the current trend was for a return to strong growth and he expected 2006 growth to be "rather at the top end of the range, that is to say 2.5 percent. If we beat that, that would be perfect," he told La Tribune.
The government has previously said it expects the economy to expand by 2.0-2.5 percent this year.
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