ECB raises Eurozone interest rates to 2.5%
The European Central Bank (ECB) has raised interest rates again but by less than its two most recent hikes. The main rate has increased by 0.5 percentage points to 2.5 per cent.
However, with the eurozone still gripped by soaring inflation, the bank is warning that further hikes are inevitable.
The ECB’s decision follows similar moves this week by the US and UK. But at 2.5 per cent, the eurozone’s current rate is still significantly lower than in America or Britain, which are at 4.5 and 3.5 per cent respectively.
Increasing interest rates is one of the main tools used by central banks to tackle rising prices, by slowing the economy down.
The cost of living has been surging this year across much of the globe, fueled by Russia’s war in Ukraine and lingering supply shortages following the COVID-19 pandemic.
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