The European Central Bank on Thurday, May 4, implemented a modest increase in interest rates as part of its efforts to combat persistent inflation but insisted that the move won’t be the last.
The officials have decided to increase the deposit rate by a quarter-point, raising it to 3.25 percent. This comes after three previous steps, each with a doubling in size.
As anticipated by traders and most economists, this announcement keeps the rate at its highest level since 2008.
The Governing Council has stated that future decisions regarding interest rates will be based on data and its assessment of the current economic situation.
Their aim is to bring rates to a level that is sufficiently restrictive to curb inflation and achieve the 2 percent target. Once this level is reached, the rates will be maintained for as long as needed to keep inflation under control.
Christine Lagarde, the President of the European Central Bank, made it clear during a news conference that the bank is not slowing down in its efforts to address the inflation issue.
"We have more ground to cover and we are not pausing," she stated.
She also revealed that the decision made on Thursday was nearly unanimous, with some of her colleagues pushing for a larger interest rate hike.
With inputs from Bloomberg
