European Central Bank Rate Hike Date: European countries are going through a lot of trouble with inflation in today’s time. Let us tell you that once again the European Central Bank has increased its interest rate by 0.75 percent.
inflation at the highest level
There are about 19 countries in the Euro Zone and the European Central Bank works as the central bank for all of them. In Europe, inflation has reached its highest level in several decades. In such a situation, despite the threat of recession, the European Central Bank has decided to raise interest rates to rein in inflation.
interest rate hiked for the third time
The prime interest rate of the European Central Bank (ECB) has now increased to 2.25 percent, from 1.5 percent so far. This is the third time since July that the European Central Bank has raised interest rates. Apart from Europe, many countries of the world including America and India have increased interest rates in the last few months to curb inflation.
Gas prices increased 10 times
Inflation in the Eurozone stood at 9.9 percent in September, which is almost five times higher than the ECB’s target of 2 percent. The war between Ukraine and Russia has contributed greatly to increasing this inflation. The reduction in the supply of cheap natural gas from Russia has increased gas prices in European countries by up to 10 times.
It is known that the ECB has issued a warning. The bank says inflation in Europe ‘remains very high’ and blames it for ‘increased energy and food prices, supply disruptions and demand surges after the corona pandemic’ Has gone. Like the rest of the world’s central banks, the European Central Bank is also increasing interest rates.
Expensive loan for business
The effect of this decision of the ECB is to make loans expensive for people and businesses, reducing demand in the market. The Central Bank expects that due to reduced demand, there will be relief from inflation. Higher loan rates also have an impact on economic activities. The effect of this has started to be seen after the increase in interest rates in the Eurozone. All rating agencies have feared a fall in the GDP of the Eurozone this year. Many experts are also anticipating a recession soon.
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