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ECB Raises Interest Rates – Reactions
Amanda Cheesley
9 September 2022
The "Policymakers have clearly prioritised tackling persistently elevated inflation, regardless of the economic fallout. The European Central Bank is in a precarious position as policymakers attempt to rein in record-high inflation even in the wake of a deteriorating economy and as recession risks loom large. Indeed, the new forecasts revealed that both the growth and inflation outlooks have worsened, with the 2023 growth forecast slashed to 0.9 per cent from 2.1 per cent in the prior forecast, while inflation forecasts were revised broadly higher through 2024.”
"A stagnating growth outlook did not deter the European Central Bank from pushing through another outsized rate hike at the September gathering, with the central bank raising its main refinancing rate by 0.75 per cent to 1.25 per cent and reinforcing the need to raise interest rates further in order to combat record-high inflation and anchor inflation expectations.