ECB raises interest rates by 50 basis points, indicating the need for additional increases to combat inflation

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As part of its continuous fight against inflation, the European Central Bank (ECB) decided to raise three of its important interest rates by 50 basis points (0.5%).

Further rises, according to the group, are likely to take place “since inflation is still far too high and is expected to continue over the target for too long.”

The ECB increased interest rates by 50 basis points, following the Federal Reserve.

In its fight against inflation, the European Central Bank (ECB) has provided an explanation of its economic strategy.

The body’s governing council made the decision to raise interest rates on its primary refinancing operations, marginal lending facility, and deposit facility by a total of 50 basis points (bps).

Since statistics indicate that inflation hit 10% throughout November, inflation rates are still well below the goal level of 2%.

With its statement that it “expects to raise them much further, because inflation is far too high and is anticipated to stay above the goal for too long,” the ECB hinted at additional interest rate increases in the future.

A hypothetical recession would be relatively “short-lived and shallow,” according to the Eurosystem, an organization made up of the ECB and the other central banks in the area. However, the ECB expressed concern about the economy’s expected relative weakening in the following years.

The institution also revealed that it will end its Asset Purchase Programme (APP) in November of next year, as anticipated by several analysts who believe it may negatively affect the bond market.

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