Interest rates in the eurozone are far from over. European Central Bank President Christine Lagarde said interest rates will continue to rise “significantly” to stem price hikes, in remarks at the post-governing council press conference.
“We expect to go up [as taxas de juro] Much more than that as inflation remains very high and is expected to remain above our target [de 2%] said Christine Lagarde.
The perspective of continuous increments is expressed with resolution Raise interest rates in the eurozone by another 50 basis points🇧🇷 The interest rate applicable to the main refinancing facility will rise to 2.5%, while the interest rate applicable to the marginal lending facility will rise to 2.75% and the interest rate applicable to the permanent deposit facility will rise to 2%, effective December 21, 2022.
After a decade of historic lows, interest rates rose for the first time in July (by 50 points) and again in September and November (75 points each) and now in December. In total for 2022, the three rates set by the ECB advanced by 250 basis points. And the road will continue.
“The main message is that we will not only raise interest rates more than that, but we will have to raise them significantly,” Lagarde emphasized. The ECB chief also made it clear that these changes will take place at a “stable pace”, noting that 50 basis points in each one would be the appropriate level.
“The steady pace means we’ve made some progress over the past few months, but we still have more to do. We’re here for the long haul,” he said. The reason for wanting to stay on course is due to the more negative outlook for the Eurozone economy.
Given the ‘context of exceptional uncertainty’, ECB staff have ‘significantly’ worsened Inflation and economic growth forecastsI hope that Inflation averages 8.4% in 2022 and then drops to 6.3% in 2023. The following year, 3.4% is expected, and in 2025, another decline to 2.3%.In the case of GDP, the ECB expects this The economy is registering a growth rate of 3.4% this year, 0.5% the next, and that accelerates again to 1.9% in 2024 and 1.8% in 2025.” According to the latest forecasts of the Euro System “staff,” the recessions will be relatively short and superficial. Lagarde indicated.
(News updated at 15:00)
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