The European Central Bank began raising its interest rates in July of last year and has since increased it seven consecutive times, from 0% to the current 3.75%.
The European Central Bank (ECB) has increased its interest rates by a quarter of a percentage point, up to 3.75%which is why it has moderated the pace of the increases.
Although headline inflation has fallen in recent months, underlying price pressures remain “strong” and inflation prospects remain “too high,” the European Central Bank explained in a note.
At the same time, it has underlined that past rate hikes are being passed through strongly to euro area funding and monetary conditions, while the lags and intensity of pass-through to the real economy remain uncertain.
Looking ahead to the coming months, the Governing Council has stressed that decisions on interest rates will continue to be based on its assessment of the inflation outlook in light of the new economic and financial data, the dynamics of underlying inflation and the intensity of the transmission of monetary policy.
It has also stressed that future Governing Council decisions will ensure that official interest rates are set at sufficiently restrictive levels to bring inflation back to the 2% medium-term objective in a timely manner and remain at those levels for as long as necessary.
Source: Eitb
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