ECB raises interest rates by 75 basis points

The European Central Bank (ECB) on Thursday raised key interest rates by 75 basis points (bp), the second such hike after a 50 bp increase in July, reported Xinhua.

Effective Sept. 14, the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility will be 1.25 percent, 1.5 percent and 0.75 percent, respectively, the ECB said at the conclusion of a Governing Council meeting here on Thursday.

The larger-than-expected rate increase reflects the bank's growing concern about surging inflation in the eurozone.

The ECB expects to raise interest rates further as "inflation remains far too high and is likely to stay above target for an extended period."

In its latest forecast for the eurozone economy, the ECB revised up its inflation projections to 8.1 percent in 2022, 5.5 percent in 2023 and 2.3 percent in 2024.

According to the bank, recent data showed a substantial slowdown in economic growth in the eurozone. Stagnation is projected for the rest of this year and for the first quarter of 2023.

Accordingly, the economic growth forecast for the eurozone has been revised down markedly. The bank now expects growth of 3.1 percent in 2022, 0.9 percent in 2023 and 1.9 percent in 2024.