The European Central Bank raised its deposit rate by 50 basis points on Thursday as it continues to fight inflation. Policymakers plan to make the same hike at the next monetary policy meeting in March. The ECB is fighting soaring inflation in Europe due in part to Russia’s war in Ukraine. Something is loading.
Thank you for your registration!
Access your favorite topics in a personalized feed on the go. download app
The European Central Bank raised interest rates another 50 basis points on Thursday as it continues efforts to calm inflation without crushing the euro zone economy.
The Governing Council of the ECB raised its main deposit rate by 50 basis points, or 0.5 percentage point, to 2.5%. It signaled that it planned to introduce a similar size increase at its next meeting in March.
Policymakers began raising interest rates from a record low of -0.5% in July, raising the cost of borrowing for the first time in 11 years.
“The Governing Council will stay the course by raising interest rates significantly at a sustained pace and keeping them at levels restrictive enough to ensure a rapid return of inflation to its medium-term target of 2%,” said said the ECB’s monetary policy committee. in a report.
“As a result, the Governing Council decided today to raise the three main ECB interest rates by 50 basis points and expects to raise them further.”
It has hiked rates five times since then as it tried to bring down high levels of inflation, which soared across Europe after Russia’s invasion of Ukraine, which caused drive up the price of key commodities like crude oil and natural gas.
Investors had anticipated the 50 point rise but were spooked on Wednesday when Spain released a consumer price index report that showed inflation jumped 5.8% hotter than expected in January.
The euro remained broadly unchanged at just under $1.10 after the bank’s announcement.