The European Central Bank on Thursday confirmed its intention to hike interest rates at its policy meeting next month and downgraded its growth forecasts.
Following its latest monetary policy meeting, the Governing Council announced that it intends to raise its key interest rates by 25 basis points at its July meeting, and expects a further hike at the September meeting.
"In line with the Governing Council's commitment to its 2% medium-term target, the pace at which the Governing Council adjusts its monetary policy will depend on the incoming data and how it assesses inflation to develop in the medium term."hit a fresh record high of 8.1% in May Markets had been eagerly awaiting the meeting in Amsterdam on Thursday, the Governing Council's first outside of Frankfurt since the onset of the coronavirus pandemic, for signs of how aggressive the shift in interest rates will have to be in the coming months.
The ECB also downgraded its growth forecasts and upwardly revised its inflation projections. Annual inflation is now expected to hit 6.8% in 2022, declining to 3.5% in 2023 and 2.1% in 2024. This marks a substantial increase from its March projections of 5.1% in 2022, 2.1% in 2023 and 1.9% in 2024.
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