The European Central Bank confirmed on Thursday that it will end its bond-buying program on 1 July, signaling a series of rate hikes to begin in July as it battles high inflation.
With prices soaring to a record 8.1% last month and inflation spreading rapidly, the ECB is pulling back on stimulus measures it has taken for most of the past decade.
The aim is to prevent the rapid price increase from penetrating the economy and sustaining itself with a price and wage spiral that is hard to break.
The ECB said it would end the Asset Purchase Program, the main stimulus tool since the eurozone debt crisis, and raise interest rates by 0.25 percentage points in July, in a move it has long promised. In September, he will likely make another move by a larger margin.
“The Governing Council is targeting key interest rates at 25 basis points at its monetary policy meeting in July,” the ECB said.
“The council expects to raise interest rates again in September,” he said. “If the medium-term inflation outlook persists or deteriorates, a larger increase would be appropriate at the September meeting.”
The ECB deposit rate is currently at -0.5% and ECB chief Christine Lagarde said it could rise to zero or slightly above by the end of the third quarter.
source: Noticias
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