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European Stocks Plunge Reacting to Interest Rates Increase Hike.

London, Thursday, 15 December 2022

As investors analysed the most recent policy pronouncements from the European Central Bank, Bank of England, and Federal Reserve, European shares fell on Thursday, with the STOXX 600 shedding 1.6% to four-week lows and Germany's DAX 40 falling close to 2%.

The ECB increased interest rates by 50 basis points, bringing borrowing prices to their highest level since early 2009, and stated that further increases are anticipated because inflation has been over goal for an extended period of time.

The eurozone's central bank also declared that it would begin trimming its €5 trillion bond holdings in March.

In other countries, policymakers increased interest rates by 50 basis points to the highest level since 2008, signalling that further tightening was necessary to return inflation to the target.

In the US, officials increased the fed funds rate by the same amount and predicted that rates would rise by a larger margin than initially anticipated next year.

(Report by: The decision Maker - Finance editors)


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