ECB governing council to make decision on interest rates
The European Central Bank’s governing council meets in Frankfurt today to decide if it will continue to increase interest rates as part of its efforts to bring inflation down.
Since July last year, the bank has increased rates after nine consecutive meetings.
The ECB has put up interest rates by over four percentage points since it began this round of rate increases in response to escalating inflation last year.
Inflation has halved since its peak last October. It is currently estimated to have been 5.3% in August across the euro area, unchanged from July.
In some countries, including Ireland, inflation went back up slightly last month off the back of higher oil prices. However, growth has stalled.
Earlier this week, the European Commission downgraded its growth forecasts for the euro area based on a sluggish German economy. It also forecast a further decline in euro area inflation to an average 5.6% this year.
The ECB will also update its forecasts for growth and inflation today.
With stubbornly high inflation but slower growth, today’s decision will be finely balanced.
Some are predicting the ECB may even pause for breath and leave rates – for at least this month – unchanged.