The European Central Bank (ECB) has made its largest-ever interest rate increase, following the US Federal Reserve and other central banks in a global stampede of rapid rate hikes meant to dampen record inflation that is squeezing consumers and pushing Europe towards recession, APA-Economics reports.
The bank’s 25-member governing council raised its key benchmarks by an unprecedented three-quarters of a percentage point for the 19 countries that use the euro currency.
The ECB usually moves rates by a quarter-point and has never raised its key bank lending rate by three-quarters of a point since the euro’s launch in 1999.
Bank president Christine Lagarde said the ECB would raise rates “over the next several meetings” because inflation was “likely to stay above our target for an extended period”. It enacted a half-point hike at its meeting in July, its first increase in 11 years.
Meanwhile, the economy was “expected to slow down substantially over the remainder of this year”, she said, adding that energy prices would stay “extraordinarily high”.
The bank said it expected more hikes ahead because “inflation may rise further in the near term” and noted that the economy was expected “to stagnate later in the year”.
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