The borrowing costs in the European Union are expected to increase in the near future after the European Central Bank (ECB) announced another interest rates hike over the “next several meetings.” The ECB already increased the interest rates earlier in September by unprecedented 75 basis points.
President Christine Lagarde confirmed the ECB’s plans during a meeting with EU lawmakers on Monday.
“We expect to raise interest rates further over the next several meetings to dampen demand and guard against the risk of a persistent upward shift in inflation expectations,” Lagarde said.
According to Lagarde, the ECB leaders will take a “meeting-to-meeting” approach and make interest rate decisions based on the way the market reacts.
Recent data showed that the best case scenario for most EU countries is having weak growth in the second part of 2022 while some economies are even in danger of decline. But despite this, the ECB won’t back away from increasing interest rates as they see it as the best way to tame inflation, which would then lead to economic recovery.
Experts believe that the European Central Bank will increase the interest rates by another 75 basis points in October. By the end of the year, the projected deposit rate is at 2 percent.
