, while the ECB decision was a tough call and while pure mathematical consensus expected no hike today, moments ago with what is most likely the final rate hike, when it raised all three deposits rates by 25bps . The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. In order to reinforce progress towards its target, the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.
Governing Council's interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission.Underlying price pressures remain high, even though most indicators have started to easeHeadline inflation to average 5.6% in 2023 , 3.2% in 2024 and 2.1% in 2025 .
Thursday’s decision takes the ECB deposit rate above the previous record high in 2001, when rate-setters raised borrowing costs to boost the value of the newly launched euro. The decision also shows policymakers remain more worried about the risk of consumer price growth staying above target than the danger of a sharp economic downturn.