ECB raises interest rates as Fed pauses
The European Central Bank announced a 0.25% hike on Thursday, taking the euro zone’s key interest rate to 4%.
“The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the permanent deposit facility will be increased to 4.00%, 4.25% and 3.50%, respectively”, says the ECB in a statement.
As the euro zone slipped into recession, the eighth consecutive interest rate hike was aimed at persistent inflation.
“The Governing Council is determined to ensure that inflation returns to its medium-term target of 2% in a timely manner,” the bank said.
The bloc’s year-on-year inflation slowed to 6.1% in May, but remained more than three times the bank’s 2% target.
On Wednesday, the US Federal Reserve halted its recent string of interest rate hikes, but warned that inflation remains “high” and hinted that rates could rise again this year.
The Fed’s benchmark interest rates will therefore remain between 5.0% and 5.25%, after 10 consecutive increases, in an attempt to control inflation accelerated by the Russian invasion of Ukraine.
This is a developing story, more to follow….
lo/fb (AFP, Reuters)
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.