ECB President Christine Lagarde has confirmed that the European Central Bank (ECB) will raise interest rates by another 50 basis points later this month to curb inflation.
“All the numbers we have seen recently confirm that this rate hike is very likely,” Lagarde told the Spanish newspaper El Correo. The central bank indicated that another similar interest rate hike was imminent last month. The ECB is trying to curb economic demand by making borrowing more expensive, which should bring inflation down.
Last week it was announced that the so-called core inflation in the eurozone, which does not include the strongly fluctuating prices of energy and food, reached a new record level of 5.6 percent in February. This inflation rate is essential in the ECB’s interest rate decision.
The central bank aims to bring inflation back to 2 percent in the medium term. However, Lagarde does not know how many rate hikes will be needed to achieve this: “I can’t say how high the rates will go”.