The ECB raises interest rates by 0.75% and announces more increases to combat high inflation

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 galloping inflation in the euro zone. And this is only the beginning.

Until inflation drops to 2%…

“We have raised interest rates by 0.75 percent and we hope to do it again later“, Christine Lagarde has announced. “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 towards levels that favor the return of inflation to our target of 2% over the medium term”

Slowdown and possible recession

The ECB president has not said how much they plan to reach, as it will depend on 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 anticipates a significant slowdown in economic growth in this second part of the year and does not rule out a recession in 2023 in case of total cut off of Russian gas.