The ECB raised rates by 75 basis points for the first time in history
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The European Central Bank (ECB) raised its base rate by 75 basis points to 1.25% per annum. The ECB has resorted to such a measure for the first time in history.
“This important step will accelerate the transition from the prevailing accommodative rate level to levels that will ensure a timely return of inflation to the ECB’s medium-term target of 2%,” explains the regulator’s motivation in a press release on its website.
The European Central Bank did not rule out the possibility of a further increase in the indicator due to rising inflation. ECB staff have revised their inflation forecasts and are now expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024.
The last time the ECB adjusted the rate was in July, for the first time since 2011, raising it immediately by 50 basis points to 0.5% per annum. The regulator then explained that the change in the rate is associated with a reassessment of inflationary risks.
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