ECB Raised Rates by 1/4 Point

The board of directors of the European Central Bank met today and unanimously decided to once again increase interest rates. This time by a quarter of a percentage point.

The July increase is the ninth in 2023, bringing the main refinancing rate to 4.25%, deposits to 3.75%, and marginal loans to 4.50%.

“Inflation continues to fall, but is still expected to remain too high for too long,” the ECB said in a note. “The Office is working to ensure that inflation returns to its target 2% over the medium term. So today it was decided to raise three cumulative interest rates by 25 basis points.”

Core inflation remains high, although some easing is observed, which could prompt Frankfurt to take a break in increases by September, if lower inflation is confirmed. Christine Lagarde, head of the ECB, one way or another explained that there would be no rate cuts in prospect. Indeed, inflation is declining, but it is expected to remain high for a long time to come.