In view of the high inflation, the central bank is tightening its monetary policy course.
(Photo: IMAGO/ANP)
Dusseldorf, Frankfurt After many years of ultra-loose monetary policy, the European Central Bank (ECB) intends to end its multi-billion dollar bond purchases on July 1 and pave the way for an interest rate hike. In a first step, key interest rates are to rise by a quarter of a percentage point. The central bank announced this after its meeting on Thursday. The decisive factor is currently the interest rate for commercial bank deposits at the central bank, which is minus 0.5 percent.
ECB President Christine Lagarde announced another, even stronger interest rate hike for September if the inflation outlook does not improve by then. A rate hike of 0.5 percentage points in the fall is therefore relatively likely. According to Lagarde, there should then be further increases “gradually” depending on the data situation. “Finally, the turning point is done,” commented Michael Heise, chief economist at HQ Trust.
The European Central Bank heralds a turnaround in interest rates
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