ECB hikes rates as it steps up battle against inflation – with more to come
European Central Bank hikes rates as it steps up battle against inflation and signals there’s more to come
The European Central Bank (ECB) raised interest rates again yesterday and signalled further hikes to come as it steps up its battle against inflation.
Less than 24 hours after the US Federal Reserve hiked rates by 0.25 percentage points to 5.25 per cent despite the crisis in the banking sector, the ECB raised them by the same amount in the eurozone to 3.25 per cent.
The European Central Bank (ECB) raised interest rates again yesterday and signalled further hikes to come as it steps up its battle against inflation.
Less than 24 hours after the US Federal Reserve hiked rates by 0.25 percentage points to 5.25 per cent despite the crisis in the banking sector, the ECB raised them by the same amount in the eurozone to 3.25 per cent.
It is the latest in a series that has lifted rates from minus-0.5 per cent since July, but smaller than the recent hikes of 0.75 and 0.5 percentage points.
Ongoing fight: ECB president Christine Lagarde (pictured) insisted the latest, comparatively smaller hike of 0.25 points did not mean yesterday’s move would be the last.
ECB president Christine Lagarde insisted the slowdown did not mean yesterday’s move would be the last. ‘We are not pausing, that is very clear,’ she said. ‘We know that we have more ground to cover.’
Fed chairman Jerome Powell suggested that the US central bank was ready to pause following aggressive hikes.
The Bank of England looks set to raise rates next week, from 4.25 per cent to 4.5 per cent, as it grapples with double-digit inflation.
Figures yesterday suggest the economy is picking up, with the dominant services sector growing at its fastest pace for a year in April, and mortgage lending bouncing back in March.
Paul Dales, chief UK economist at Capital Economics, said there was a ‘decent chance’ UK rates will peak at 4.5 per cent, but warned they could hit 5 per cent if inflation stays higher than expected.
It is the latest in a series that has lifted rates from minus-0.5 per cent since July, but smaller than the recent hikes of 0.75 and 0.5 percentage points.
ECB president Christine Lagarde insisted the slowdown did not mean yesterday’s move would be the last. ‘We are not pausing, that is very clear,’ she said. ‘We know that we have more ground to cover.’
Fed chairman Jerome Powell suggested that the US central bank was ready to pause following aggressive hikes.
The Bank of England looks set to raise rates next week, from 4.25 per cent to 4.5 per cent, as it grapples with double-digit inflation.
Figures yesterday suggest the economy is picking up, with the dominant services sector growing at its fastest pace for a year in April, and mortgage lending bouncing back in March.
Paul Dales, chief UK economist at Capital Economics, said there was a ‘decent chance’ UK rates will peak at 4.5 per cent, but warned they could hit 5pc if inflation stays higher than expected.