We are doing this to bring down inflation, which remains far too high. More rate hikes will come. They will depend on how we see the economy and inflation developing.
To help fight inflation, we have made our targeted lending programme less attractive for banks.
Prices are rising across the economy. Very high energy prices are still the main reason for this. Supply problems are getting better but are still driving up prices. The exchange rate has also pushed up inflation, by making imports more expensive.
This weakness will probably last for the rest of this year and into the first part of 2023. High inflation, problems with gas supplies and worries about the future mean that people are buying less and businesses are cutting production.
Unemployment is still low and new jobs are being created. But as the economy weakens, this could change.
The outlook is more uncertain, especially because of Russia’s war against Ukraine. Central banks across the globe are also raising interest rates to fight inflation.
Here is what the Governing Council decided about the ECB’s interest rates and instruments at its latest meeting.
Read our explanation of the reasons behind the latest monetary policy decisions.
Copyright 2022, European Central Bank
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