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ECB lifts interest rates by 25 bps, as expected

Published 07/27/2023, 08:16 AM
Updated 07/27/2023, 08:08 AM
© Reuters –The European Central Bank raised its key deposit rate by 25 basis points to 3.75% Thursday, its ninth increase in a row, as expected, as it continued to battle persistent inflation.

By 08:15 ET (12:15 GMT), the pan-Europe Stoxx 600 index rose 1.1% to 470.70, while EUR/USD rose 0.4% to 1.1127.

The central bank for the 20 countries that use the euro had previously signaled a rate rise this month, with inflation in the region at 5.5% when last reported despite borrowing costs being lifted by 4 percentage points since last July.

However, amid growing evidence of an economic downturn, attention will now turn to President Christine Lagarde’s upcoming press conference for clues as to whether another rate hike is coming in September or if July marks the end of this aggressive tightening cycle.

The ECB could also decide to pause in September when it will provide updated staff growth and inflation forecasts, and then hike later, as the U.S. Federal Reserve has done, if needed.

Latest comments

europe should increase further rates to bring the cpi down
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