The European Central Bank announced a 50 basis point hike at midday on Thursday, confirming forecasts that it will stick to its tactics to tackle inflation, despite developments in banking institutions and fears that have been expressed.

With the new hike, total interest rate hikes since summer 2022 have risen to 3.5% (350 basis points).

According to the ECB’s estimates, inflation will remain at high levels for a long time yet, and therefore, measures are needed to de-escalate it as soon as possible.

The announcement states that the Board of Directors is monitoring developments very carefully and is ready to intervene, if deemed necessary, to ensure price stability, as well as financial stability in the eurozone.

The ECB assures that the banking sector in the euro area is resilient with strong capital adequacy and liquidity. In any case, there is a full toolkit to support the eurozone financial system, if and when necessary to maintain the smooth transmission of monetary policy.