BUSINESSEUROPE
ECB raises interest rates by 0.25%
9 minutes ago9 minutes ago
The European Central Bank has raised interest rates by another 0.25% as inflation remains above targets. Monetary policymakers had faced a dilemma posed by persistent inflation and sluggish economic growth.
https://p.dw.com/p/4WKWC
Euro sculpture in Frankfurt
The ECB increased its three main interest rates for commercial lenders to 4.0%, 4.25% and 4.5%Image: AP
The European Central Bank on Thursday raised its three main interest rates by 0.25%, after analysts had been divided on whether the eurozone’s central bank would issue a 10th consecutive hike or pause the increases.
The changed rates put the main refinancing operations rate — the fee ordinarily charged to commercial lenders to borrow money and arguably the most important of the three — to 4.25%.
Uncertainty prior to decision: either small hike or pause
The euro nudged up from a three-month low against the dollar on Thursday as traders waited on the ECB’s decision.
The eurozone’s interest rate setters faced a tough call, with the battle against stubborn inflation making the case for a rise and the fear that higher borrowing costs could hurt growth.
Expectations about the meeting were split between a pause in rate rises and an increase of 25 basis points. Market pricing had been leaning toward a hike.
rc/msh (AFP, dpa, Reuters)
