Today, the European Central Bank (ECB) has announced a 50 basis point rate hike, indicating its readiness to provide liquidity to banks if required, in light of the recent turbulence within the banking sector.
For several weeks, the ECB had been signaling its intention to raise interest rates at its March meeting. This decision comes as inflation rates across the 20-member region persistently exceed the established target. Preliminary data from February revealed a headline inflation rate of 8.5%, significantly surpassing the central bank’s 2% target.
By implementing this rate increase, the ECB aims to address the ongoing inflationary pressures while remaining committed to supporting the stability and liquidity of the European banking sector during this period of uncertainty.