Interest Rate Hike by the European Central Bank

The European Central Bank (ECB) continued its aggressive rate hike to rein in record high inflation despite all recession concerns.  For the 2nd month in a row, the ECB raised interest rates.

The bank gave the message that interest rate hikes will continue to rein in inflation at a 40-year high. President Lagarde warned that the economy will probably slow down further in the last quarter. After the September meeting, the ECB raised interest rates by 75 basis points in the October meeting. The main refinancing rate rose to 2 percent, the marginal lending rate to 2.25 percent and the deposit rate to 1.50 percent. This doubled the deposit rate to its highest level in more than 10 years. The Bank said that price pressures have spread in recent months, inflation is still very high and will remain above the target for a long time, and that it expects to raise interest rates further. It emphasized that interest rate decisions will be taken on a meeting basis. It also tightened the terms of more than 2 trillion euros of ultra-cheap pandemic-era loans provided to banks, known as TLTRO. It was announced that TLTRO interest rates will be the average policy rate from November 23 until the redemption date. Inflation in the Eurozone was realized at 10 percent last month, well above the ECB's 2 percent target. The ECB has increased interest rates in the last 3 meetings due to high inflation. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!