ECB raises key interest rates for first time since 2023

The European Central Bank (ECB) has raised all three of its key interest rates by 25 basis points for the first time in three years.

The bank said, in a statement, that “the outlook remains uncertain, with upside risks for inflation and downside risks for economic growth,” Caliber.Az reports.

At a press conference in Frankfurt, ECB President Christine Lagarde made it clear that she and her colleagues had done a very good job of keeping inflation in the eurozone practically at the target level over the past 12 months.

Lagarde explained that the rate hike was driven by economic pressure stemming from external geopolitical factors, including the Middle East conflict.

She stressed that the increase was not a preventive measure, but a response to current developments.

According to her, the energy shock is spreading across all sectors of the economy, creating clear direct costs as well as already emerging indirect costs.

She also stressed that rising energy prices will further increase inflation in the summer and keep it significantly above the target level in the first half of 2027.

By Bakhtiyar Abbasov