ECB hikes interest rates despite growing threat of recession

euronews (in English)

The decision raises the ECB’s benchmark deposit rate to 4%, up drastically from minus 0.5% just a little more than a year ago and the highest since the euro was established in 1999.

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00:00 The ECB raises interest rates again by a quarter of a point to 4.5%, the highest in two decades.

00:09 The measure in the midst of economic stagnation should curb inflation in the euro area. In

00:15 addition, the ECB has lowered its growth forecasts in the euro zone for the years 2023 to 2025.

00:23 Inflation continues to decline, but is still expected to remain too high for too long.

00:30 We are determined to ensure that inflation returns to our 2% medium-term target in a

00:36 timely manner. In order to reinforce progress towards our target, the Governing Council

00:43 today decided to raise the three key ECB interest rates by 25 basis points.

00:49 This is the tenth consecutive increase in the cost of borrowing, despite signs of wear

00:54 and tear in the economy. The European Commission predicts average euro zone GDP growth of 0.8%

01:00 this year, with forecasts ranging from 2.2% for Spain to -0.4% for Germany. They predict

01:07 inflation won't fall to 2.1% until 2025, with Commission President Ursula von der Leyen

01:13 identifying persistent high inflation as a great economic challenge for the bloc.

01:18 [MUSIC PLAYING]

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