The European Central Bank has raised interest rates by 75 basis points, seeking to tackle record inflation, despite fears that the eurozone is already heading into recession because of soaring energy prices.
The move lifts the bank’s benchmark deposit rate from zero to 0.75%, the highest level since 2011.
The Bank says it expects to raise interest rates further, because inflation remains far too high and is likely to stay above target for an extended period.”
It revised up its inflation expectations, forecasting an average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024.
The European Central Bank move follows a hike from -0.5% to zero at its July meeting. The central bank, which sets monetary policy for the 19 euro-using nations, has kept rates in negative territory since 2014 in a bid to spur spending and combat low inflation.
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