The ECB raised the interest rate to the highest level since 2008
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The European Central Bank raised the key rate by 50 basis points — from 2.5% to 3% — at a meeting on Thursday, February 2, according to the regulator’s press release. This is the maximum rate since 2008.
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Decision of the ECB
The interest rate on the main refinancing operations and interest rates on the margin credit line and deposit line will be increased to 3%, 3.25% and 2.5%, respectively, from February 8, 2023.
The ECB will continue the course of significantly increasing interest rates at a sustainable pace and keeping them at levels that are considered restrictive enough to ensure a timely return of inflation to its medium-term target level of 2%, the ECB said in a statement.
The Governing Council of the ECB intends to raise interest rates by another 50 bp. at his next monetary policy meeting in March, after which he will assess the next direction of his monetary policy.
The European regulator’s decision followed the US Fed rate hike by 25 bps. (up to 4.5-4.75% per annum) on Wednesday, February 1, and the Bank of England’s interest rate increase by 50 bp. (up to 4%) at the meeting on Thursday, February 2.
Read also: The Bank of England raised the interest rate to 4% Inflation
Inflation in the Eurozone in January, according to preliminary data, amounted to 8.5% compared to 9.2% in December. Annual inflation has slowed to a minimum since last May due to lower energy prices, while prices for food and industrial goods continued to rise. Nevertheless, the indicator remains much higher than the target value.
At the previous meeting in December, the ECB raised the base rate by 50 bps to 2.5% per annum. Economists polled by Bloomberg expect the ECB to once again raise interest rates by 50 bp at its meeting next month.
Read also: Inflation in the Eurozone slows down for the third month in a row Author: 
News feed editor Anna Nedogybchenko. She writes on the following topics: Finance, banks, economy, investments
- Inflation
- Economy
Source: Ministry of Finance
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