ECB raises key interest rate to 3.75%
The European Central Bank (ECB) announced a 0.25% hike on Thursday, raising the euro zone’s key interest rate to 3.75% in a bid to curb inflation.
The latest announcement slows the pace of rate hikes after the ECB raised the benchmark rate by 0.5% three times in a row.
What did the ECB say?
Thursday’s increase puts the ECB’s deposit rate at 3.25%, the highest level since 2008.
The ECB’s move follows a similar announcement by the US Federal Reserve on Wednesday, which also raised borrowing costs by 0.25% – and hinted it could soon stop raising interest rates.
While the ECB is not expected to break its cycle of interest rate hikes, the central bank did not include a commitment to future hikes in its statement – instead it said it would take a “data-driven approach”.
“The inflation outlook remains too high for too long,” the central bank said in a statement.
eurozone inflation
The price of goods started to rise in the euro zone’s 20 member states after Russia’s invasion of Ukraine last year, and after Moscow started to reduce gas deliveries to Europe.
The ECB is aiming for price stability over the medium term at an inflation rate of 2% – but that target has been exceeded for months.
rs/rt (AP, dpa, Reuters, AFP)
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.