ECB sticks to the script and delivers another 25bps hike on its three key interest rates today, meeting market expectations. The main refinancing, marginal lending, and deposit rates now stand at 4.25%, 4.50%, and 3.75% respectively, effective August 2.
In its statement, the ECB highlighted the ongoing concerns around inflation, indicating it was poised to remain “above the target for an extended period”, despite expectations of a decrease over the remainder of the year. It also noted that while some measures showed signs of easing, “underlying inflation remains high overall.”
ECB reiterated that it is committed to setting interest rates at “sufficiently restrictive” levels “for as long as necessary”. Stressing the bank’s ongoing commitment to a data-dependent strategy, it added, “The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.”
