The Governing Council of the European Central Bank (ECB) on Thursday decided to “raise the ECB’s three main interest rates by 25 basis points,” the bank said in a statement.
Thus, the ECB is signaling the entry into the final stage of the interest rate hike cycle after the institution started the most aggressive cycle of monetary policy tightening since last July.
Although the eurozone economy is confirming inflationary pressures, weak credit demand growth is forcing the ECB to be more cautious about raising interest rates so as not to stifle economic growth.
The ECB’s decision on Thursday came just a day after a similar rate hike by the Fed. After today’s meeting, the ECB said that “the outlook for inflation remains too high for a long time,” but limited itself to reiterating that it would continue to take a “data-driven approach” to future policy decisions.
Eurozone inflation remains well above the ECB’s 2% target, rising to 7% in April from 6.9% in March.
Source: Hot News
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