The European Central Bank will decide on interest rate hikes and the fate of government debt on Thursday. How do you manage the tricks of monetary policy? Take a quiz.
10:03•Updated 10:25
The European Central Bank ECB will probably raise interest rates again today.
The general view on the market is that the central bankers will settle for “only” an increase of half a percentage point at this point. The US central bank, the Fed, also decided to increase the key interest rate 0.5 percentage points (you switch to another service) on Wednesday.
Over the course of the fall, the ECB has raised interest rates in the euro area by 0.75 percent at a time, so that the deposit rate – the best-known key rate – is now 1.5 percent. After Thursday, it would hurt to two percent.
The key interest rates decided by the ECB directly affect, for example, interest rates on housing and car loans.
The ECB will reveal its decision in the afternoon. At the same time, the central bank gives an indication of how it intends to continue buying government and corporate debt securities in the coming months.
An important economic forecast is coming
Just as expected as the interest rate decision itself on Thursday is the ECB economists’ assessment of future economic development. Namely, the central bank adjusts monetary policy according to how it estimates consumer prices, i.e. inflation, to develop in the future.
The ECB publishes its economic forecast four times a year.
Monetary policy has become very important when inflation is running at record highs and at the same time the economy is threatening to go into recession. While waiting for the afternoon’s decisions, you can check below how well you master the nuances of the money debate.
Do you want to test your Euro knowledge more? Here, a battery of questions about the history of the common currency from a few years ago, when the euro turned 20 years old.
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