ECB intends to increase interest rate by 25 basis points in July

10:48 Fri, 31 March

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21.Jun .2022 12:30

ECB intends to increase interest rate by 25 basis points in July

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The European Central Bank’s governor on Monday said that the bank intends to increase the interest rate by 25 basis points in July.

Speaking at the European Parliament, Christine Lagarde said the bank may also make another raise in September.

"The calibration of this rate increase will depend on the updated medium-term inflation outlook," she added.

Lagarde said that the eurozone activity is being "dampened" by higher energy prices, supply chain disruptions and uncertainty.

However, she added that the service sector contributes to economic growth.

Recalling that the inflation in the eurozone was at 8.1% in May, she said that energy and food prices in the region were up 39.2% and 7.5% in May on an annual basis due to the Russia-Ukraine war.

She noted the expectations for the annual inflation rate in the region were 6.8% for 2022, 3.5% for 2023 and 2.1% for 2024.

"In line with our commitment to our 2% medium-term target, the pace at which we adjust our monetary policy will depend on the incoming data and how we assess inflation to develop in the medium term," Lagarde added, AA reports.