Yemisi Izuora
The European Central Bank has approved interest rate hike aimed at squelching out-of-control inflation, increasing rates at the fastest pace in the euro currency’s history and underscoring the bank’s determination to control prices despite the threat of recession.
The 25-member governing council raised its interest rate benchmarks by three-quarters of a percentage point at a meeting Thursday in Frankfurt, matching its record increase from last month and joining the U.S Federal Reserve in making a series of rapid hikes to tackle soaring consumer prices.
ECB President Christine Lagarde acknowledged the risk is growing that the 19-country eurozone may plunge into recession but says “inflation remains far too high” and will stay high for an extended period, so the bank expects to keep hiking.
“We are not done yet. There is more ground to cover,” she told reporters, despite bank expectations that the economy will weaken the rest of this year and beginning of next.
“In the present state of uncertainty, with the likelihood of recession looming much more on the horizon … everyone has to do their job,” Lagarde said. “Our job is price stability. This is our primary mandate, and we are riveted to that.”
