The ECB loosens the pace of the tightening and raises rates by another 25 basis points

The Governing Council of the European Central Bank (ECB) has decided to raise interest rates by another 25 basis points in an attempt to stem inflation in the countries of the Eurozone, which according to the latest Eurostat estimates has exceeded 7 percent in April. The deposit rate thus increases by 3.75 per cent, while the main and marginal refinancing rates rise to 3.75 and 4 per cent, respectively.

“The inflation outlook continues to be too high for too long“Headline inflation has eased in recent months, but underlying price pressures remain strong. At the same time, past rate hikes are forcefully transmitted to the financial and monetary conditions of the euro area, while the delays and strength of transmission to the real economy remain uncertain”adds the note, recalling that the next decisions will be taken following a data-dependent approach to determine the appropriate level and duration of the restriction.

This is the seventh rate hike by the central bank since July last year: the one before today was decided a month and a half ago, by 50 basis points. A choice in line with forecasts but no less worrying: the Minister of Economy, Giancarlo Giorgetti, already in recent weeks has sounded the alarm about the “risks for financial stability and serious budgetary problems”. Words very similar to those used by the Bank of Italy in its report released at the end of April.

The ECB follows in the footsteps of the Fedthe US central bank, which yesterday raised rates on the dollar by 0.25 per cent, bringing the reference values ​​above 5 per cent, the highest level since 2007. The president Jerome Powell however, he hinted that a phase of easing in US monetary policy could now begin. For Europe, however, the scenario remains more complicated: pending the conference of the president of the ECB, Christine Lagardetoday’s increase is expected to not be the last.