The European Central Bank is trying to curb high inflation with rising interest rates. The central bank is following up for the fifth time in a row - and is already announcing another interest rate hike.
With the fifth interest rate hike in a row, the euro monetary authorities are bracing themselves against the persistently high inflation. The European Central Bank (ECB) is again raising the key interest rate in the euro area by 0.50 percentage points to 3.0 percent. That was decided by the Central Bank Council in Frankfurt. A further interest rate hike has already been announced for the next monetary policy meeting on March 16th.
ECB President Christine Lagarde outlined this course back in December: "We have to go a long way." In January, Lagarde reaffirmed the central bank's determination: Interest rates would have to "continue to rise significantly and steadily" in order to curb inflation sufficiently, said the Frenchwoman. The ECB is aiming for price stability in the euro area in the medium term with an inflation rate of two percent. This target has been a long way off for months.
Although inflation weakened again in January, consumer prices in the currency area were still 8.5 percent above the level of the same month last year, according to an initial estimate by the statistics agency Eurostat. In Germany, the inflation rate was 8.6 percent in December. Above all, high energy and food prices are fueling inflation.