On Thursday 27 October 2022, the European Central Bank (ECB) Governing Council decided to raise the three key ECB interest rates by 75 basis points.
The is the third major policy rate increase in a row by the ECB and the Governing Council expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target. The Governing Council will base the future policy rate path on the evolving outlook for inflation and the economy.
According to the ECB, inflation remains far too high and will stay above the target for an extended period. In September 2022, euro area inflation reached 9.9%. In recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation. The Governing Council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations.
Key ECB interest rates
The three key interest rates which includes the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively, with effect from Wednesday 2 November 2022.
