Photo: ANP
The European Central Bank (ECB) is expected to raise interest rates further on Thursday to curb rising inflation in the eurozone. Inflation has fallen somewhat recently due to lower energy prices, but food prices, for example, are still clearly rising.
By making borrowing more expensive, the ECB can curb demand in the economy and this should stop prices from rising rapidly. It remains to be seen how much interest rates will rise. On average, economists expect interest rates to rise by a quarter of a percentage point.
In any case, he probably won’t stop at that rate hike. The European Central Bank may also have to raise interest rates in the eurozone in June and July, as President Claes Nott of De Nederlandsche Bank (DNB) has already indicated. Indeed, the International Monetary Fund called on the European Central Bank last week to continue raising interest rates until the middle of next year.
For consumers, a high interest rate is noticeable, for example, when obtaining a mortgage. As the ECB’s interest rates rise, banks like ING and ABN AMRO can also slowly raise their savings rates again.
In addition to the increase in consumer prices, policy makers in Frankfurt will also take into account the consequences of the recent turmoil in the financial sector in their interest rate decision. Three banks in the United States recently collapsed. In addition, the Swiss bank Credit Suisse has had problems. This large bank had to be bailed out to prevent its financial stability from being endangered.
