Fighting inflation: The European Central Bank raises rates by 75 basis points for the first time

The European Central Bank (ECB) has raised its policy interest rate by 75 basis points to 1.25 percent for the first time in its 24-year history. Concerned that inflationwhich has seen peak levels, is becoming more and more persistent, the authorities are struggling to keep the worst price increases in almost 50 years under control. Price increases are depleting the savings of households and putting pressure on production.

In the face of the energy crisis affecting the region and record-high inflation, ECB President Christine Lagarde’s hints on the bank’s stance are in the focus of investors.

Increasing interest rates for the first time in 11 years in July meeting, the ECB raised the refinancing rate to 0.50 percent, the marginal interest rate from 0.25 percent to 0.75 percent, and the interest rate paid on deposits from minus 0.50 percent to minus 0 percent.

Inflation in the Eurozone had reached its historic peak in August with an annual rate of 9.1 percent.