The ECB is resisting the development with strong interest rate hikes, since the summer of 2022 it has raised its key interest rate by a total of 4.25 percentage points. Why?
The increase in consumer prices in the euro zone did not slow down further in August. The annual inflation rate remained at 5.3 percent, as reported by the Eurostat statistics office in Luxembourg on Thursday. The medium-term inflation target of the European Central Bank (ECB) of two percent is thus still clearly exceeded. Last year, inflation was at times in the double digits as a result of the Ukraine war.
The ECB is resisting the development with strong interest rate hikes, since the summer of 2022 it has raised its key interest rate by a total of 4.25 percentage points. However, the further course is uncertain.
In contrast to headline inflation, core inflation declined without volatile prices for goods such as energy. It fell in the countries with the common euro currency from 5.5 percent in the previous month to 5.3 percent. In the opinion of many economists, core inflation reflects basic inflation and therefore represents the inflation trend somewhat better than the overall rate.
Compared to July, overall consumer prices rose 0.6 percent and core consumer prices rose 0.3 percent.
Source: Stern
