The European Central Bank is expected to raise its key rates again on Thursday, in the face of inflation that is still considered too high, despite grumbling in some countries against the risk of weakening the economy.
A year after launching the fastest rate hike cycle in their history, the guardians of the euro are staying the course, even though the peak seems to be getting closer.
ECB President Christine Lagarde already announced in June a “very likely” further hike for Thursday’s meeting of her governing council.
“Virtually everyone expects an increase of 0.25 percentage points,” as in June, Joachim Nagel, head of Germany’s influential central bank, said last week.
This would take the ECB’s benchmark deposit rate for bank cash to 3.75%.
What next? The interest of the meeting “is going to be more about the indications the ECB might give on the future direction of monetary policy, with the September meeting in sight,” according to Eric Dor, Director of Economic Studies at the IESEG School of Management.
To combat record inflation in the eurozone following the post-pandemic recovery and then the outbreak of the Russian war in Ukraine, the ECB has since last July raised its key rates at an unprecedented speed, increasing them by 400 basis points in one year.
