Today the Board of Directors of the European Central Bank (ECB), which, based on analysts' estimates, is expected to announce a new increase in key interest rates by 25 basis points, as part of the efforts to fight inflation.
The announcements from ECB President Christine Lagarde are expected to be made during a press conference in Frankfurt, scheduled for 15:45 Cyprus time.
The new increase will be the eighth in a row since last July, despite the mild de-escalation of inflation, which however remains at high levels.
Speaking before the European Parliament's Economic and Monetary Affairs Committee on June 5, Christine Lagarde said future ECB decisions will ensure that interest rates are driven to levels that are sufficiently restrictive to bring inflation back to the medium-term target. of 2% and will be maintained at these levels for as long as necessary.
“we will continue to take a data base approach to determine the appropriate level and duration of the restrictive policy,” he added.
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In the midst of the jump in prices, especially in energy products, following Russia's invasion of Ukraine, the ECB from July 27, 2022 has proceeded with a cumulative increase in its key interest rates by 375 basis points.
After last May's increase of 25 basis points, the interest rate on the main refinancing operations as well as the interest rates on the marginal financing facility and the deposit acceptance facility were set at 3.75%, 4.00% and 3.25% respectively.
At the same time, analysts estimate that a possibly last increase in interest rates by 25 basis points is expected in the next July session.
Analysts of Berenberg economics, estimate that the ECB Board will once again underline the need to focus on macroeconomic data and likely to indicate a further hike in the July session or even a standstill.
The session debate will take place in the wake of new Eurostat data, which showed the eurozone entered a mild technical recession after after the data update, real GDP in the euro area shrank by 0.1% quarter-on-quarter in both the fourth quarter of 2022 and the first quarter of this year, which will fuel supporters of a softer monetary stance.
Already the rate of granting new loans has fallen, while inflation, despite falling to 6.1% (from its peak at 10.6% last October) remains very high, while structural inflation (excluding energy and food prices) is at 5.3%.
