Status: 15.12.2022 2:30 p.m
The European Central Bank (ECB) is bracing itself against the high inflation with another interest rate hike. The key interest rate in the euro area will rise by 0.50 percentage points to 2.50 percent, as announced by the ECB.
In its fight against inflation, the European Central Bank (ECB) is no longer raising interest rates quite as much as it was recently. The monetary authorities around the head of the central bank, Christine Lagarde, decided to raise the key interest rate by 0.50 points to 2.50 percent.
The deposit rate, which is decisive on the financial markets, was increased by the same amount to 2.00 percent. This is the fourth rate hike in a row. In September and October, the ECB raised interest rates in giant steps by 0.75 percentage points each.
Ready for more rate hikes
The currency watchdogs also signaled their readiness for further interest rate hikes. “The interest rate decisions of the Governing Council of the ECB will continue to depend on the data situation and will be determined from meeting to meeting,” it added. Most recently, inflation in the euro area had weakened slightly for the first time since mid-2021. The inflation rate fell to 10.0 percent in November after 10.6 percent in October. This data had fueled hopes that inflation might be beginning to peak.
The ECB also announced that it would start reducing its central bank balance sheet, which had been swollen as a result of years of bond purchases, from the beginning of March. This has now grown to 8.5 trillion euros. The portfolio of bonds alone from the two large purchase programs APP and PEPP that have ended was recently around five trillion euros.