ECB puts inflation first as it raises rates by 0.5%

Inflation is projected to remain too high for too long across the eurozone. Therefore, the Governing Council has decided to increase the three key European Central Bank interest rates by 50 basis points, to ensure the ‘timely return’ of inflation to the 2% medium-term target.

Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 3.50%, 3.75% and 3.00% respectively, with effect from 22 March 2023.

The ECB left it benchmark rate at zero or below for a decade from 2012 until September last year when it ordered a 0.75% rise. There have been three more hikes – one of 0.7% and two of 0.5% – since then.

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