Image: APA/AFP/ANDRE PAIN
The central bank announced the decision following an external council meeting in Athens in the afternoon (2:15 p.m.). Many economists expect that the monetary authorities will not tighten interest rates any further for the time being. Inflation in the euro area has recently weakened, but at the same time concerns about the economy are growing.
After the previous council meeting in mid-September, ECB President Christine Lagarde signaled that the interest rate increase at that time could have been the last for the time being. However, she did not close the door on a further increase, citing data developments.
Since July 2022, the monetary authorities have been counteracting increased inflation as a result of the Ukraine war with an unprecedented series of interest rate increases. Higher interest rates make loans more expensive, which can slow down demand and counteract high inflation rates. However, more expensive loans are also a burden for the economy because loan-financed investments become more expensive.
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Source: Nachrichten
