At the European Central Bank’s monetary policy meeting in September, there will almost certainly be a further increase in key interest rates. There is also a growing likelihood that it will be more vigorous than the one that occurred in July.
Interest rate increase is being planned
The deteriorating situation regarding inflation outlook will most likely prompt the European Central Bank’s leadership is to raise key interest rates more sharply than previously assumed. A “hike” of 0.75 percentage points is in play. So far, it has been expected to grow by half a percent. That was the case in July. Said development was reported by five well-known sources, as reported by Reuters.
Actions will be taken no matter the recession
According to the sources, the European Central Bank is committed to a more sharp increase in interest rates. The fact, that the eurozone economy is threatened with recession does not matter. The ECB considers the ever-increasing inflation, which is close to double-digit in year-on-year terms, to be a far greater danger.
“I do not insist on supporting an increase of 0.75 percentage points, but I see no reason not to at least discuss it. When the Fed made a similar increase, why not put it on the table as well,” the source said. It will all be clear on September 8th.
