The European Central Bank raises interest rates three quarters of a point, leaving them at 1.25%. The highest increase in its history to combat runaway inflation in the euro zone. And this is just the beginning.
Until inflation drops to 2%…
“We have raised interest rates by 0.75 percent and we hope to do it again later“, announced Christine Lagarde. “Because inflation remains too high and is likely to remain above our target for a long period of time. This important step advances the transition from the current highly accommodative level of interest rates to levels that favor a return of inflation to our medium-term target of 2%.”
Slowdown and possible recession
The president of the ECB has not said what figure they plan to reach, since it will depend on the inflation data, which in August it reached 9.1% on average in the euro zone due, above all, to the exorbitant prices of energy due to the war in Ukraine.
The agency expects a significant slowdown in economic growth in this second part of the year and does not rule out a recession in 2023 in the event of a total cut-off of Russian gas.
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