The European Central Bank raised interest rates by half a percentage point to 3%, and showed its firmness in the fight against inflation in advance that it will apply the same increase in March.
(See: Eurozone grows again after six months of contraction).
The President of the ECB, christine lagarde had already announced this rise of 0.50 percentage points in December, confirmed on Thursday, but the institution surprised by announcing that it will do the same again in March.
The institution’s interest rates rose on Thursday to a range of between 2.5% and 3.25%, the highest since November 2008.
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Although this announcement is not ‘irrevocable’, the “current scenarios -especially regarding inflation- lead us to think that the time has not come to slow down the cycle of increases”, Lagarde specified. The ECB is facing a massive price hike sparked by Russia’s war in Ukraine, which prompted it to launch a series of unprecedented rate hikes in July, ending nearly a decade of cheap money.
But different from the US Fed which on Wednesday raised 0.25 percentage points, the institution believes that it is not yet time to slow down its monetary tightening.
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For its part, the Bank of England (BoE) also yesterday raised its official interest rate by 0.5 percentage points, to 4%, its highest level since 2008, to counter inflation above 10% in the UK, indicator that adds to the poor results recorded by that economy and that has generated protests.
AFP
