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This is the ECB's fastest rate hike yet and it is likely that the ECB will continue to pursue this policy to curb inflation amid rising price and wage pressures.
The euro symbol in front of the European Central Bank headquarters in Frankfurt, Germany. Photo: AFP/TTXVN
On the evening of May 4 (Vietnam time), the European Central Bank (ECB) announced its decision to raise interest rates by 25 basis points to 3.25%, as inflation in the Eurozone is slowing down with a stable outlook.
This is the ECB's seventh consecutive rate hike since July 2022 to counter persistently high inflation. This brings the bank's rate hikes to a total of 375 basis points since July last year. This is the ECB's fastest rate hike and it is likely that the ECB will continue to pursue this policy to curb inflation amid rising price and wage pressures.
French financial firm BNP Paribas earlier said the ECB's latest inflation data reinforced the case for a rate hike of 25 basis points, compared with three consecutive 50 basis point hikes. BNP Paribas expects 3.75% to be the ECB's maximum rate.
The latest figures released by the European Statistical Office (Eurostat) show that the inflation rate in the Eurozone in March increased by 6.9% compared to the same period last year. This figure is lower than the forecast of 7.1% by Bloomberg news agency and financial data company FactSet, and cooled significantly compared to the 8.5% in February. This is also the lowest inflation rate in the past year in the Eurozone.
In its latest forecasts, the ECB expects inflation in the eurozone to average 5.3% in 2023, well above its 2% target. It then forecasts inflation to fall to 2.9% in 2024 and 2.1% in 2025.
According to VNA
