European Central Bank hikes interest rates by 0.25% to 3.75%, the highest level since 2008.
This ECB increase represents the seventh rate increase introduced in less than a year in an effort to drive down sticky inflation. Accumulatively, the ECB has raised interest rates by 3.75% since last summer.
“The past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain,” said the regulator.
Underlying inflation across the eurozone eased slightly for the first time in 10 months, which led to some analysts backing the case for ECB to slow the most aggressive interest-rate hiking campaign in its history.
At least two more interest rate hikes are expected this year while inflation remains sticky.
