The European Central Bank (ECB) raised its key interest rate by 0.75 percentage point, the so-called “Giant Step,” which is the first time in history since the introduction of the euro in 2002.
Bloomberg and other foreign media reported on the 8th (local time) that the European Central Bank raised its key interest rate by 0.75% points from 0.5% to 1.25%.
The ECB took a “giant step” in July, raising 0.5 percentage points, but this time it took a giant step up by 0.75 percentage points.
The reason for such a large increase in the benchmark interest rate is to respond to soaring prices.
In recent years, consumer prices in 19 euro-speaking countries have jumped about 9% from a year ago. Energy and food prices have reportedly soared, especially after Russia’s invasion of Ukraine.
The European Central Bank also mentioned the possibility of further increases. Christine Lagarde, president of the company, said, “We can raise it further following this increase. It’s because the inflation rate is still too high.
Meanwhile, the Federal Reserve, the U.S. central bank, also announced an additional rate hike.
The United States has decided on the giant step twice so far, and it is in a position that it can make this decision again to control prices.
Fed Chairman Jerome Powell said, “We need to act firmly and strongly as we have done so far. He also said, “We have to continue until we catch prices.”