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Friday, September 29, 2023
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The ECB tightens the rate screw for the ninth time and raises them to 2008 highs

Date: September 29, 2023 Time: 05:36:33

The European Central Bank (ECB) has raised interest rates in the euro zone again on Thursday by 25 basis points, to 4.25%, a movement with which Christine Lagarde will explain in just half an hour from the announcement. It is the ninth consecutive hike in benchmark rates since it began moving them higher in July 2022 when they were at 0%. They are thus at their level in September 2008 and slightly below the peak of 2000.

On what it will do on September 14, when it will put the issue of interest rates back on the table, the central bank insists on its approach dependent on economic data and still does not give clues, although it points to three factors: economic evolution, core inflation and intensity of monetary transmission. “While some indicators show signs of moderation, core inflation remains broadly elevated. Previous interest rate hikes continue to be transmitted strongly: financing conditions have tightened again and are increasingly dampening demand, which is an important factor in bringing inflation back to target,” the ECB said.

“Inflation continues to decline, but is still expected to remain too high for too long. The Governing Council is determined to ensure that inflation returns to its medium-term 2% target soon. Consequently, it has decided today to raise the three key ECB interest rates by 25 basis points,” the ECB said in its statement. The central bank has taken the decision without making public the advance of inflation in July that will be known tomorrow in Spain and Monday in the euro zone.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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