The European Central Bank raised interest rates for the ninth straight time in its yearlong campaign to stamp out painfully high inflation, coming as worries about recession fuel speculation that Thursday’s hike could be its last.
ECB President Christine Lagarde had all but promised the quarter-percentage point increase, putting the focus at her post-meeting news conference on whether the bank will raise rates again at its September meeting or hold off after a record series of rate hikes.
Inflation in the eurozone has fallen from its peak of 10.6% in October to 5.5% in June — still well above the bank’s target of 2% considered best for the economy. With Thursday’s quarter-point increase, the ECB has raised its benchmark deposit rate from minus 0.5% to 3.75% in one year, the fastest credit tightening since the euro currency was launched in 1999.
Germany already has recorded two straight quarters of falling economic output, meeting one definition of recession. A third is possible, with figures for the April-to-June period coming out Friday.
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