There is a good chance that European Central Bank interest rates will rise further. It appears that ECB executives will still implement a 25 basis point rate hike, but there is also the possibility that it will be a half percentage point hike.
That’s according to a report from the June board meeting. There is broad consensus on a 25 basis point rate hike. “There was also an initial preference for a 50 basis point increase in key ECB interest rates given the risk of high inflation becoming even more persistent.”
Despite the fact that inflation has been declining for some time, concerns remain about the level of price increases. After all, people are still not entirely convinced that the current level of interest rates can suppress inflation effectively enough. This means an increase in the base interest rate to 4.5%.
Influence on banks
What happens next is still uncertain. Officials have recently struck a cautious tone, saying next steps depend on incoming data. Vice President Luis de Guindos said core inflation was showing signs of weakening, while chief economist Philip Lane stressed the impact of past increases across banks would gain momentum.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
