ECB cautious, raises interest rates by 0.25%

ECB cautious, raises interest rates by 0.25%

2023-05-04 17:48:58

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Cautious, the European Central Bank (ECB) slows the pace of its rate hikes and raises its key rates by 25 basis points. Inflation is still too high and this could go on for a long time in the euro zone, that is what the guardians of the euro are anticipating.

In the wake of the American Federal Reserve, the European Central Bank in turn increased its interest rates by 0.25%. A more moderate increase compared to the previous ones.

A monetary tightening that the boss of the ECB, Christine Lagarde, justifies by the fight against soaring prices:

« The inflation outlook remains too high and for too long. Headline inflation has slowed in recent months, but price pressures remain strong. Future decisions by the Governing Council will ensure that key interest rates are reduced to sufficiently restrictive levels allowing inflation to reach a maximum of 2%. Like I said: we’re on a journey, but we haven’t arrived yet. »

No pause is therefore planned in the tour-de-vis that the ECB intends to continue. Unlike the Fed, the US central bank, which retains the option of taking a break on rates. But also to raise them if inflation resists.

European stock markets ended lower on Thursday May 4, as the unsurprising conclusions of the European Central Bank meeting did not allow investors to reverse the gloomy trend since the start of the week. London lost 1.10%, Paris 0.85% and Milan 0.61%, all three now falling close to their lowest level in a month. Frankfurt held up better, but also lost 0.51%.

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Read also : US: Fed raises rates again to tackle inflation

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