The European Bank is going to raise rates for the sixth time since June
European Central Bank President Christine Lagarde announced the bank’s intention to raise interest rates by 0.5 percentage points next March to curb inflation due to energy prices.
Lagarde told the European Parliament in Strasbourg that, given the pressure created by the inflation rate, which is still high, especially due to energy prices, the European Central Bank “intends to raise interest rates by another 0.5 percentage points” at its next meeting . meeting in March.
Lagarde added that in March the central bank will publish a new set of economic forecasts that will allow it to “assess the future course of our monetary policy.”
Lagarde explained that keeping interest rates “at a limited level will allow reducing inflation in the future by slowing demand, and also protect against the risk of a permanent increase in inflation expectations” from households and companies.
“We are committed to returning inflation to our medium-term target of 2 percent in line with our mandate, and we will take the necessary measures to achieve this,” she said.
It is worth noting that if the European Central Bank raises interest rates next month, then since July last year it has raised them 6 times in a row, which is 3.5 percentage points in total.
Consequently, rates are approaching a level called “bound”, which slows down consumption and investment to ease pressure on prices.