This Thursday (2), the European Central Bank raised interest rates by another 50 basis points.
While policymakers remain focused on curbing high inflation, despite recent data suggesting prices may be peaking in the eurozone.
ECB President Christine Lagarde said the central bank would “stay the course” in its current cycle of monetary policy tightening, adding that inflation was still “very high”.
Euro zone price growth slowed more than expected in January, according to data from the European Union’s statistics agency.
The eurozone grew unexpectedly in the fourth quarter, defying expectations that the ECB’s aggressive rate hikes in 2022 would trigger a deep recession in the near term.
But quarterly growth in the last three months of 2022 was just 0.1%, while headline inflation of 8.5% last month is still well above the 2% target declared by the ECB.
ECB members will have a chance to look at more inflation figures before making their next policy decision in March, with policymakers keen to learn more about how much price growth is slowing.
The ECB’s own December policy guidance predicted that another 50 basis point increase would be “possibly” needed at next month’s meeting.
Investors will be attentive to comments on the March meeting, as Lagarde will hold a press conference later on Thursday (2).
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