The European Central Bank (ECB) has announced a 25 basis point increase in interest rates on Thursday, marking the highest rate recorded since the launch of the Euro currency in 1999. This move is seen as an effort to combat persistently high inflation.
The ECB stated, “Inflation continues to decline but is still expected to remain too high for too long.”
Annual inflation in the 20-country Eurozone remains elevated, standing at 5.3 percent last month due to rising oil prices that have pushed up energy costs. Economic growth in the Eurozone during the April to June period expanded at a slow rate of 0.1 percent compared to the first quarter.
This decision marks the ECB’s 10th consecutive interest rate hike, reflecting its commitment to curbing inflation. ECB President Christine Lagarde stated, “We are determined to ensure that inflation returns to our two percent medium-term target in a timely manner. In order to reinforce progress towards our target, the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.”
The ECB’s decision comes in response to the ongoing challenge of inflation management within the Eurozone.
