European Central Bank announces new super hike of interest rates to tame inflation
The European Central Bank (ECB) has announced a new jumbo hike of interest rates in a bid to tame the spiralling inflation stifling the eurozone's economy.
The bank's three key interest rates were each bumped by 75 basis points, mimicking the decision taken in September.
The decision was confirmed on Thursday afternoon, following days of speculation around the size of the increase, and will take effect on 2 November.
It marks the third hike this year for the 19 EU countries that use the euro.
The ECB "expects to raise interest rates further" and will base its future moves on the "evolving" economic outlook, the organisation said in a statement after a meeting of the Governing Council.
"Inflation remains far too high and will stay above the target for an extended period," it noted.
Like other central banks around the world, the ECB is taking action to make spending more costly for both consumers and companies in order to bring down soaring prices.
But the fight against inflation is expected to be painful. High-interest rates can constrain demand, investment and hiring, causing the economy to slow down.
The ECB appears determined to push through these concerns and fulfil her bank's central mandate of price stabilisation, a goal that the Ukraine war and the energy crisis have turned into an uphill struggle.
Annual inflation in the eurozone reached 9.9% in September, an all-time high figure and almost five times the 2% target pursued by the ECB. The three Baltic countries showed inflation rates beyond the 20% mark.
The upward trend initially affected energy bills but has now spread over food, alcohol, industrial goods and services.
The ECB's interest rates have a cascading effect across the eurozone and directly influence the rates
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