ECB Raises Key Rates 25 Basis Points to Combat High Inflation Pressures

ECB Highlights

• ECB raises key rates by 25 basis points
• Asset purchase program to be reduced at a measured pace
• Council ready to adjust instruments to achieve 2% inflation target

ECB Overview

The European Central Bank (ECB) has raised its key interest rates by 25 basis points due to ongoing high inflation pressures.

While headline inflation has declined in recent months, underlying price pressures remain strong. The Governing Council will continue to take a data-dependent approach to determine the appropriate level and duration of restriction, and its policy rate decisions will continue to be based on its assessment of the inflation outlook.

The ECB will also continue to reduce its asset purchase programme portfolio at a measured and predictable pace, with reinvestments under the programme expected to discontinue as of July 2023.

The Governing Council is ready to adjust all of its instruments within its mandate to ensure that inflation returns to its 2% target over the medium term.