Key moments
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Inflation will be above 3% even in 2024. Growth will be lower than expected -
The central bank notes that this will have been the last increase, but interest rates will remain at these levels for a long time. -
The ECB confirms the increase in interest rates, the tenth consecutive. The rate rises to 4%, the highest level ever recorded -
“Stubborn” inflation makes an interest rate hike this Thursday more likely
Live updates
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Inflation will be above 3% even in 2024. Growth will be lower than expected
The year 2023 is expected to end with an average inflation rate of 5.6% in the euro area and even next year a less pronounced fall than previously estimated is expected. The ECB’s new macroeconomic projections point to an average inflation rate of 3.2% in 2024, with a decrease to 2.1% in 2025.
On the other hand, the news is not encouraging in terms of growth either. Compared to the ECB’s previous projections, the ECB’s expectations staff of economists it became a growth of only 0.7% in 2023, 1% in 2024 and 1.5% in 2025; These are downward revisions, for all years.
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The central bank notes that this will have been the last increase, but interest rates will remain at these levels for a long time.
In the statement accompanying the decision to raise interest rates, the ECB gives what can be read as a signal that this will have been the last interest rate increase in this cycle.
“Based on the current assessment, the ECB considers that interest rates have reached levels that, maintained for a sufficient period of timewill contribute significantly to ensuring that inflation returns to target, in a timely manner.”
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The ECB confirms the increase in interest rates, the tenth consecutive. The rate rises to 4%, the highest level ever recorded
The ECB even decided to proceed with another interest rate increase, of 25 basis points, which raises the deposit rate – the most important for monetary policy at the moment – to 4%, the highest level in the history of the ECB. euro. zone.
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“Today there should be a new rise in interest rates”
Filipe García, economist at Financial Markets Information, explains that this “should be the last rise of this cycle.”
Listen to this morning’s “Prompt Response” here.
“Today there should be a new rise in interest rates”
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“Stubborn” inflation makes an interest rate hike this Thursday more likely
At the same time as the interest rate decision will be announced, the ECB will publish a set of updated macroeconomic projections that should estimate average inflation above 3% not only this year but also in 2024.
If this is confirmed to be the ECB’s projection, it would mean that the central bank’s economists recognize that inflation will fall more slowly than expected, reinforcing the idea that Christine Lagarde could announce a new interest rate rise, the tenth consecutive. .
Read here the advance text published by the Observer on Wednesday.
ECB. “Stubborn” inflation makes an interest rate hike this Thursday more likely
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Good afternoon.
Let’s follow this article. live blog the decision of the European Central Bank (ECB) on interest rates, which will be announced at 1:15 p.m. (Lisbon time).
Christine Lagarde’s press conference begins half an hour later, at 1:45 p.m.
Follow all decisions here.
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Source: Observadora
