After 50 basis points in March, the European Central Bank announced on Thursday that it would raise its interest rates by 25 basis points, acknowledging a slowdown in the pace of monetary tightening to take into account the timid decline in inflation and weak economic growth in the Euro zone
The reference rate, by remunerating excess inactive bank deposits at the ECB window, thus rises from 3.0% to 3.25%. By making credit more expensive, the ECB wants to curb the demand for mortgage, consumer or business investment loans and thus stop the rise in prices.
First drop in core inflation in a year
Inflation in April continued to sail well above the 2% target, recovering 0.1 percentage points, to 7.0%, after months of deceleration. But excluding energy, food, tobacco and alcohol prices, “core” inflation fell for the first time in a year, to 5.6% from 5.7% in March, according to Eurostat.
The institution has raised rates by 3.50 percentage points since last July as part of an unprecedented campaign to tighten credit conditions to curb rising consumer prices.
Source: BFM TV
