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December 03
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The European Central Bank raised interest rates by an unprecedented 75 basis points to curb rampant inflation, even as a recession is now increasingly likely as the EU lost access to vital Russian natural gas, Reuters wrote.

The ECB raised its deposit rate from zero to 0.75% and raised its main refinancing rate to 1.25%, the highest level since 2011.

In the next few meetings, the Governing Council expects to raise interest rates further to reduce demand and guard against the risk of persistently rising inflation expectations, the ECB said in a statement.

The significant rate hike comes at a time when the ECB has raised its own inflation forecasts and continues to expect price increases well above the 2% target over the forecast horizon.

ECB staff have significantly revised their inflation forecasts, and inflation is now expected to average 8.1 percent in 2022, 5.5 percent in 2023, and 2.3 percent in 2024, the ECB said in a statement.

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