European Central Bank to increase interest rates for first time in more than 11 Years in July

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The European Central Bank (ECB) has said that it intends to raise interest rates for the first time in more than 11 years next month. ECB President Christine Lagarde yesterday said, the hike will be of 0.25 percentage points and will take place in July. The bank also intends to end its bond-buying stimulus programme on 1st of July.

The bank said, the ECB’s main policy interest rate is currently at -0.50 per cent and it could be back at zero or above by the end of September. The last time it raised interest rates in the eurozone was in 2011.

The ECB also cut its growth forecast for the eurozone from 3.7 per cent to 2.8 per cent for 2022 and from 2.8 per cent to 2.1 per cent for 2023.

Several other central banks have already started raising interest rates as they try to slow inflation that has been accelerating amid surging energy costs.