The European Central Bank remains committed to preventing energy-driven inflation from spreading across the economy, though François Villeroy de Galhau cautioned that pinpointing dates for any interest rate increases is premature.

In an interview with Italy's La Stampa, the French central bank governor and ECB policymaker addressed the sharp rise in energy prices triggered by the U.S.-Israeli conflict with Iran. This escalation has fueled debates among ECB officials on whether to raise borrowing costs to stop the price pressures from affecting broader goods and services.

Villeroy stated the ECB is "ready to act in this direction if needed," but emphasized that talks of pre-set dates for hikes appear "very premature." Some colleagues have floated an April move as possible, while others argue against haste given limited current evidence supporting tighter policy.

He acknowledged the war's negative impact on inflation prospects, noting the central bank cannot avert immediate shocks but must ensure they do not lead to persistent price rises.

The outgoing governor, set to depart in June, pointed out that the ECB's adverse and severe inflation forecasts might overstate risks by excluding potential policy responses.

Markets now anticipate three ECB rate hikes this year, with the initial increase fully priced in by June, according to traders.