ECB: New increase in interest rates by 75 basis points

The European Central Bank further increased interest rates by 75 basis points today, Thursday, reaching their highest level since 2009. Thus, the key interest rate now stands at 2% (from 1.25% previously), the marginal funding rate to 2.25% (from 1.50% previously) and the deposit rate to 1.50% (from 0.75% previously).

This is the third significant increase in a row, as stated in its announcement by the ECB in an effort to deal with high inflation in the eurozone.

As the ECB points out, this means that there has been “significant progress in removing the accommodative stance of monetary policy”. However, he added that further growth was likely as inflation remained “very high”. and will remain, as he says, above the 2% target for a long time. In September, inflation in the Eurozone reached 9.9%.

“In recent months, a surge in energy and food prices, problems in supply chains and a post-pandemic recovery in demand have contributed to widening price pressures and rising inflation. The Governing Council’s monetary policy seeks to reduce demand support and prevent the risk of a persistent upward shift in inflation expectations,” the ECB said.

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