The central bank has raised interest rates by 200 basis points in the last three meetings (Getty)
said the boss European Central Bank Christine Lagarde, the bank should continue to collect interest rates fight inflationeven as the chances of a recession in the euro area have increased.
“Our job is price stability and we have to achieve it using all the tools at our disposal,” Lagarde said in an interview with Latvia’s Delphi news website, published today, Tuesday. “.
Lagarde stressed that “the objective is clear and we have not yet reached it”, without specifying to what extent the rise in interest rates could stop. “We will have more rate hikes in the future,” he told her.
On Thursday, the European Central Bank raised its deposit rate by another 75 basis points to 1.5%, the highest rate since 2009, in an effort to prevent the rapid rise in prices from taking hold.
Therefore, the central bank has raised interest rates by 200 basis points in the last three meetings. Market estimates indicate that the bank could take a number of other moves that could lead to an increase in the deposit rate, which is currently between 1.5% and nearly 3% in 2023.
The bank said in a statement that “the board of directors has made a decision (to raise the interest rate) and should raise it further to ensure inflation returns on time to the target medium-term rate of 2%.
Inflation rose to 10.7% in October and is expected to remain above the ECB’s target until 2024, increasing the chances of businesses and households starting to adjust their spending as they lose faith in the central bank’s will. to contain inflation.
“With inflation rising to over 10%, the European Central Bank will prioritize price stability and will continue to raise interest rates no matter what happens,” Andrew Kenningham, chief European economist, told Reuters on Tuesday. Capital Economics.
The U.S. Federal Reserve is expected to raise interest rates by 75 basis points this week, but markets still hope the central bank will offer a lower 50 basis point hike in December to avoid pushing the world’s largest economy into chaos. .
(Reuters, The New Arab)
