The European Central Bank (ECB) shared on Thursday that it has opted to raise its key interest rates by 0.25 percentage points, making this its tenth straight hike.
The interest rate on the main refinancing operations will now stand at 4.5%, while the rate on the marginal lending facility and the rate on the deposit facility will be at 4.75% and 4% respectively. "Inflation continues to decline but is still expected to remain too high for too long," ECB underlined. "Based on its current assessment ... [ECB believes that] interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target."
As for macroeconomic projections for the eurozone, inflation is expected to run at 5.6% in 2023, 3.2% in 2024 and 2.1% in 2025. Meanwhile, core inflation is anticipated to stand at 5.1% in 2023, 2.9% in 2024 and 2.2% in 2025. The euro area economy is expected to grow by 0.7% in 2023, 1.0% in 2024 and 1.5% in 2025.
