The headquarters of the European Central Bank (ECB) in Frankfurt.
(Photo: dpa)
Frankfurt, Dusseldorf The European Central Bank (ECB) wants to throttle its bond purchases faster than planned. The central bank announced this in a statement on Thursday. As expected, interest rates will remain at the previous level.
The decision comes as a surprise. Central bank chief Christine Lagarde and her colleagues from the Governing Council of the ECB gave signals for such a step at their meeting in February. Because of the war in Ukraine and the unforeseeable consequences for the economy, many experts recently assumed that such a step would wait.
Inflation has recently turned out to be significantly higher than the ECB and many economists had expected. In February, it reached 5.8 percent in the euro area – the highest level since monetary union began.
The war in Ukraine has caused energy and commodity prices to rise sharply, which is likely to fuel inflation even further. On the other hand, the crisis is weakening the economy, especially in countries that are heavily dependent on Russian gas, such as Germany and Italy, but also many countries in Eastern Europe.
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More: “Stagflation shock of epic proportions” – Inflation in the euro area rises to 5.8 percent