The European Central Bank (ECB) has loosened its pace a bit to raise interest rates in the fight against inflation. Key rates were increased by 0.25 percentage point to 3.75 percent. It is the seventh rate hike in a row. In March they had raised interest rates by half a percentage point.
In July 2022, after years of ultra-accommodating monetary policy, the monetary watchdogs implemented the interest rate turnaround and since then, including the new step, have rapidly increased policy rates by a total of 3.75 percentage points.
In the US, too, the US Federal Reserve raised interest rates by 0.25 percentage point on Wednesday and is now heading for a pause.
Fight against persistent price increases
For the ECB, the battle against the continued price increase in the 20-country community has not yet been won. Because inflation is still well above the central bank’s target of 2 percent. Inflation rose slightly to 7.0 percent in April, after falling from 8.5 percent in February to 6.9 percent in March.
High inflation rates may persist
The much-remarked core interest rate, excluding volatile energy and commodity prices, fell only minimally to 5.6 percent in April, from 5.7 percent in March. This drives many euro watchers. Because that could indicate that the period of high inflation could last longer than previously thought.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
