European Central Bank rate decision May 2023 after inflation figures
Christine Lagarde, President of the European Central Bank (ECB), announced a new rate decision Thursday following new inflation data.
The European Central Bank on Thursday increased its benchmark interest rate by 25 basis points as it continues to fight a surge in consumer prices, with rates now at levels not seen since November 2008.
"The inflation outlook continues to be too high for too long," the ECB said in a statement. With the latest announcement, the bank's benchmark rate will move to 3.25%, as of May 10.
The decision comes after inflation figures released earlier this week showed an increase in the headline rate to 7% for April. At the same time, core inflation, which excludes food and energy prices, decreased slightly to 5.6%.
"Headline inflation has declined over recent months, but underlying price pressures remain strong," the central bank said.
The central bank embarked on its current hiking path in July 2022, when it brought its main rate from -0.5% to zero. However, despite consistent rate increases since, inflation remains well above the ECB's target of 2%. Estimates published last week by the International Monetary Fund suggest that inflation will not reach the ECB's target until 2025.
Recent data also shows that the euro zone economy grew less than expected in the first quarter of the year, registering an anemic GDP of 0.1%. However, unemployment numbers showed a slight improvement in March from the previous month at 6.5%.
Source: CNBC
