The ECB raises rates by half a percentage point, to 2.50%, its highest level since 2008

MADRID, 15 Dic.

The ECB raises rates by half a percentage point, to 2.50%, its highest level since 2008


The Governing Council of the European Central Bank (ECB) has decided to raise interest rates by 50 basis points, so that the interest rate for its refinancing operations will stand at 2.50%, while the deposit rate will reach 2% and the loan facility will reach 2.75%.

"The Governing Council has decided today to raise the three official ECB interest rates by 50 basis points and, based on the considerable upward revision of the inflation outlook, plans to continue increasing them," the entity announced in a statement. .

With this fourth consecutive rise in the price of money, which has reached its highest level since December 2008, the ECB has moderated the intensity of the normalization of its monetary policy, after the two increases of 75 basis points undertaken in the October and September meetings, after an initial rise of half a percentage point in July.

In particular, the Governing Council estimates that interest rates "will still have to increase significantly at a sustained pace" until they reach sufficiently restrictive levels to ensure that they return to the 2% target in a timely manner in the medium term.

The ECB's decision comes days after learning that the euro area's year-on-year inflation rate stood at 10% in November, six tenths below the historical record registered in October and its first slowdown in 17 months.

The ECB's less aggressiveness joins the line of other large central banks, such as the United States Federal Reserve and the Bank of England, which announced less intense rate hikes at their respective December monetary policy meetings.

Specifically, the Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) decided yesterday to unanimously approve a rise in the country's interest rates of 50 basis points, to place them at a target range of between 4.25% and 4.5%, moderating the rate of rise from the 75 basis points of the previous decision.

Thus, the price of money in the United States reached its highest levels since December 2007, a few months before the crisis broke out that year with the bankruptcies of Bear Sterns and Lehman Brothers. With this Wednesday's increase, the Fed has raised rates seven times out of the eight times it has met during 2022.

For its part, the Monetary Policy Committee of the Bank of England has decided this Thursday to raise the reference interest rate for its operations by 50 basis points, which will stand at 3.50%, its highest level since autumn 2008, after raising 75 basis points at their previous meeting.