ECB Raises Rate by 75 Basis Points
London, Thursday, 08 September 2022
Following a 50bps rate increase in July, the ECB increased interest rates by an extraordinary 75bps in September 2022, which was in line with analyst predictions.
Currently, the marginal loan facility's rate is 1.5%, the primary refinancing rate is 1.25%, and the deposit facility's rate is 0.75%.
A sustained upward shift in inflation expectations should be avoided by raising interest rates further over the course of the upcoming sessions, according to policymakers.
However, any changes will still be based on evidence and implemented one meeting at a time. President Lagarde stated during the press conference that the ECB is far from the rate that will assist in bringing inflation back to the aim of 2%.
While growth was downgraded to 3.1% in 2022, 0.9% in 2023, and 1.9% in 2024, the central bank sharply revised up inflation estimates to average 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024.
(Source: European Central Bank // Report by: The Decision Maker – Finance editors)