European Central Bank raises interest rates by 75 basis points

The Governing Council of the European Central Bank (ECB) today decided to raise the three key ECB interest rates by 75 basis points.

In a statement, the ECB said that it expects to raise interest rates further, to ensure the timely return of inflation to its 2 percent medium-term inflation target. The Governing Council will base the future policy rate path on the evolving outlook for inflation and the economy, following its meeting-by-meeting approach.

Inflation remains far too high and will stay above the target for an extended period. In September, euro area inflation reached 9.9 percent. In recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation. The Governing Council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations.