This will be the first time since 2011 that the European Central Bank has raised its key interest rates. ECB President Christine Lagarde confirmed this after Thursday’s monetary policy meeting of the Governing Council.
Interest rate increase
“We will do everything we can to ensure that inflation returns to the target level of 2% in the medium term. It’s not one step, it’s a journey,” Lagarde said at a press conference on Thursday. The first increase in interest rates is expected to take place on 21 July and the next on 8 September. While the July increase will be a quarter percentage point, the September increase was not specified.
Fighting inflation
However, the increase in interest rates will be preceded by an end to asset purchases, the so-called quantitative easing, from 1 July. The European Central Bank has thus decided to actively fight inflation, which has already reached eight percent in the euro area and is the highest since the creation of the European Monetary Union. The ECB is one of the last major central banks in the world to tighten monetary policy. The US Fed and the Bank of England have already raised rates.
