The European Central Bank (ECB) has raised the key interest rate by 0.25%. But the ECB has slowed the pace of its interest rate. It is already the 7th interest rate hike in a row. The deposit rate that financial institutions receive from the central bank for parking surplus funds, which is decisive on the financial markets, are now set at 3.25%. The ECB also said it was ready to adjust all its instruments to ensure that inflation returns to the target of 2% in the medium term.
For the ECB, the battle against inflation has not been won yet because inflation remains well above the target level of 2%. In April, the inflation rate even rose slightly to 7.0%, after falling to 6.9% in March from 8.5% in February. High inflation above the 2% ECB target could possibly last even longer than previously anticipated.
Sven Franssen