TOKYO: The European Central Bank (ECB) will probably continue to raise interest rates beyond 2%, but “jumbo” rate hikes will not become a new habit, France’s central bank chief said in a speech in Tokyo on Tuesday.

The ECB has increased rates at its fastest pace on record recently, hiking them by a combined 200 basis points to 1.5% in just three months.

Despite that rapid pace, markets still expect the bank to hike rates further to tame sharp, broad-based inflation. “We are clearly approaching what I would call the ‘normalisation range’ which can be estimated at around 2%.

We should reach this level by December,“ French central bank Governor Francois Villeroy de Galhau said in a speech at a business conference in the Japanese capital.

Inflation surge puts focus on ECB’s balance sheet

“Beyond this level, we will probably continue to raise rates, but we may do so in a more flexible and possibly less rapid manner.

Jumbo rate hikes will not become a new habit.“ Signs of peaking headline and core inflation in the United States were “good news” for everyone, he said, given that the world’s top economy had been at the forefront of the global inflation cycle.

Data released last week showed US consumer prices rose less than expected in October, bringing the annual increase below 8% for the first time in eight months.

“US monetary tightening has had strong spillovers on the rest of the world through the high level of the dollar,” the central banker said.