The European Central Bank raised interest rates by another 50 basis points

The European Central Bank (ECB) has raised its base interest rates in the Eurozone by another 50 basis points. The announcement, which is in line with market expectations, came this Thursday after a monetary policy meeting, with monetary authorities led by Christine Lagarde still pushing for a repeat hike in March.

“The Governing Council will follow the path of significant interest rate hikes at a sustainable pace and keep them at a sufficiently restrictive level to ensure that inflation returns to its medium-term target of 2% in a timely manner. The Governing Council today decided to increase the ECB’s interest rates. Three key interest rates at 50 basis points that is expected to continue to rise,” he explained in a statement.

From February 8, the interest rate applicable to the main refinancing operations will increase to 3%, while the interest rate applicable to the margin credit line will increase to 3.25%, and the rate applicable to the permanent deposit line will increase to 2 ,five%. . And the path will not stop here.

“Given the pressure on core inflation, the Board of Governors intends to raise interest rates by another 50 basis points at the next monetary policy meeting in March and then assess the subsequent direction of monetary policy,” he said defending it. keeping interest rates at a restrictive level “would reduce inflation over time by curbing demand, and also protect against the risk of a permanent rise in inflation expectations.”

During 2022, the ECB raised interest rates – for the first time since 2011 – four times, by a total of 200 basis points. However, the Harmonized Consumer Price Index (HICP) retreated to 8.5% in January from the previous level of 9.2% in December – but core inflation, which measures the level of inflation penetration into the economy, is at 7%.

(News in update)