ECB raises interest rates by another 25 basis points in ninth successive increase
Via Lagarde Daniel Central (ecb) Bank European Pic: Christine President Roland/afp Getty Images
The European Central Bank (ECB) has hiked interest rates by 0.25%, marking the ninth successive increase since the regulator began its campaign last July to drive down inflation.
The ECB have now raised borrowing rates by 4.25% in total and some experts, including ECB governing council member Klaas Knot, that a peak will soon be reached.
However, others expect another hike in September as inflation remains sticky.
"While some measures show signs of easing, underlying inflation remains high overall," said the ECB in a statement.
Economist Jim Power previously told the Irish Examiner that falling prices, specifically witnessed in wholesale energy across Europe, will not be enough to deter hawks from future hikes.
Around 200,000 people on tracker mortgages in Ireland face more immediate pain when interest rate hikes are announced because their rates are directly linked to ECB decisions.
Inflation in the eurozone has halved since last October but, at 5.5%, it remains well above the ECB's 2% target.
On the other hand credit creation, demand for loans and economic activity have all slowed sharply, showing the ECB's steady diet of rate hikes is already taking a toll on the economy.
"The developments since the last meeting support the expectation that inflation will drop further over the remainder of the year but will stay above target for an extended period," the ECB said.
- Additional reporting by Reuters