In addition, another rate hike was implemented in September, although the volume of the hike is not mentioned in this case.
Euskaraz irakurri: EBZk uztailean amaituko ditu aktiboen erosketak, eta interes-tasak 25 puntu igoko dituela aurreratu du
The Governing Council of the European Central Bank (ECB) has decided that net purchases under its public asset purchase program (APP) will end in July. Likewise, it put forward that in its July 9 meeting will implement a 25 basis point increase of interest rates. In addition, another rate hike was implemented in September, although the volume of the hike is not mentioned in this case.
In recent months, the ECB has reduced the purchase volume under the protection of the purchase of public assets. In April, it acquired assets worth 40 billion, while it reached 30 billion in May and is expected to reduce its volume to 20 billion in June.
As decided by the ECB, the monetary authority will not fatten its balance sheet in the seventh month of the year, so from 1 July it will only reinvest the maturities of portfolio assets. These reinvestments will take place over a “longer period” after interest rates begin to rise. In any case, the purchases will continue for the time necessary to maintain “ample” liquidity conditions.
interest rates
On the other hand, for the purpose curb inflationThe ECB has announced that it will raise an interest rate by 25 basis points at its meeting on 9 July.
In addition, an interest rate hike was implemented in September. While he did not explicitly state that this second hike is also 25 basis points, he stressed that “the calibration of this rate hike will depend on the medium-term inflation outlook” so that if these projections “continue or deteriorate, a further hike will be appropriate.” .
After September, the Governing Council has expected a “gradual” path of rate hikes with the aim of bringing inflation back to 2% in the medium term.
“High inflation is a major challenge for all of us. The Governing Council will ensure that inflation returns to its target of 2% in the medium term,” the ECB stressed in a statement released Thursday.
The rise in interest rates that will take place in July will be the first implemented by the monetary authority since July 2011. In addition, it means that interest rates should return to levels not seen since 2014.
Inflation and GDP
Eurozone gross domestic product (GDP) posted a quarter-on-quarter increase of 0.6% in the first quarter of 2022, four-tenths more than in the previous three months, according to the latest data published by Eurostat, the office of community statistics.
On the other hand, prices registered an inflation rate of 8.1% in May, seven-tenths more than in the previous month, as a result of the rise in energy and food prices, marking their maximum since there are historical records.
Similarly, the annual underlying inflation rate of the countries that have adopted the euro as their common currency, which is the result of excluding the evolution of energy, fresh food, alcohol and tobacco prices, has increased by three-tenths, to 3.8%.
Turning to unemployment, the eurozone rate for April, the last available, remained unchanged at 6.8%. In the EU as a whole, unemployment stood at 6.2%, also the same as in March.
The next meeting of the Governing Council of the body responsible for the monetary policy of the euro area will take place on July 21, 2022.
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Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
