Europe will raise interest rates

The Governing Council of the European Central Bank (ECB) will carry out this week the first rise in interest rates in the eurozone since July 2011, thus ending an era in the monetary policy of the eurozone in the face of harassment runaway inflation and the unbridled fall in the price of the euro against the dollar in recent months, while Italy is going through a new political crisis.

This first rise, which will affect the three rates managed by the central bank (deposit, refinancing and loan), was reported by the ECB at its previous meeting in June, so except for an unexpected surprise, which would have a difficult explanation, it will be 25 basis points.

In addition to the confirmation of the announcement of the first rise in interest rates in the eurozone, Thursday’s meeting of the Governing Council will also feature another point of great interest, since the details of the anti-fragmentation plan on which it is working could be announced the ECB.

From Bank of America they point out that a rate hike of more than 25 basic points “is unlikely, but not unthinkable”, something that they also relate to the presentation of the new ECB tool to combat fragmentation.

K. Tovar

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Source: EITB