The European Central Bank announces another 25 basis point interest rate hike! Lagarde Says "Will Not Stop Raising Interest Rates" Central Bank | Eurozone | European Central Bank
On July 27th local time, the European Central Bank held a monetary policy meeting and decided to raise all three key interest rates in the eurozone by 25 basis points. European Central Bank President Lagarde stated on the same day that the economic outlook for the eurozone is deteriorating, and inflation rates may remain high for a longer period of time.
The European Central Bank announced on the 27th that it will raise the main refinancing rate, marginal lending rate, and deposit mechanism rate to 4.25%, 4.50%, and 3.75%, respectively, starting from August 2nd. Since the start of the interest rate hike process in July last year, the European Central Bank has raised interest rates nine times in a row, totaling 425 basis points.
Lagarde: Inflation may remain high for an extended period of time
European Central Bank President Lagarde stated at a press conference that the eurozone inflation rate is expected to further decline this year, but may exceed the medium-term target of 2% for an extended period of time. The European Central Bank will use inflation rate data as a basis to achieve a sufficiently high restrictive level for key interest rates in the eurozone, and maintain it at this level if necessary, to push inflation rates back down.
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European Central Bank President Lagarde: Although some indicators are falling, overall, potential inflation remains high, due to the sustained impact of previous energy price increases on overall economic prices.
Lagarde: The economic outlook of the eurozone is deteriorating
According to a survey conducted this week, the demand for loans by Eurozone businesses experienced the largest decline on record in the second quarter, driven by sustained high interest rates. The demand for housing loans, consumer loans, and household loans has also declined. This indicates that the one-year interest rate hike by the European Central Bank is affecting the economy of the region.
Regarding this, Lagarde warned that there is a high degree of uncertainty in the economic growth of the eurozone.
![The European Central Bank announces another 25 basis point interest rate hike! Lagarde Says "Will Not Stop Raising Interest Rates" Central Bank | Eurozone | European Central Bank](https://a5qu.com/upload/images/636f5a002d3150f6e6c6a992c37ed909.jpg)
European Central Bank President Lagarde: The recent deterioration in the economic outlook of the eurozone is mainly due to weak demand. High inflation and tightening financing conditions are suppressing spending, especially putting pressure on the manufacturing industry, which is also affected by weak external demand. Housing and commercial investment also show signs of weakness, and it is expected that the economy will remain weak in the short term.
Despite this, Lagarde still stated that she will not stop the pace of interest rate hikes, believing that there is a possibility of a pause in interest rate hikes, but that the pause period will not be too long.