The Strategist

Reuters: ECB may raise rate above 2%

09/12/2022 - 11:06

According to five unnamed sources familiar with the matter, the European Central Bank (ECB) may increase its key interest rate to 2% or higher to combat inflation, according to a report by Reuters. They contend that the record-high inflation in the euro zone is forcing the ECB leaders to act this way.

Andrej Hanzekovic
Andrej Hanzekovic
The sources claim that an increasing number of lawmakers believe it is likely that the ECB will have to raise rates to or beyond 2%, which is considered restrictive and is slowing the economy.

The agency sources say that a move like this might be made if the ECB's inflation forecast for 2025, which will be released in December, is still higher than 2%. According to the source, the ECB has so far actively urged EU states to take actions that would lower energy costs, which have drastically increased since the commencement of the open conflict in Ukraine.

ECB spokesperson declined to comment to Reuters.