Macro Snapshot – ECB raises rates in fight against inflation; Japan’s June exports up 19.4%
Cairo: The European Central Bank raised interest rates by 50 basis points in an effort to fight inflation, while Ukraine kept its 11-year high key interest rate unchanged.
Japan’s June exports rose 19.4 percent year-on-year, while Britain’s budget deficit worsened as prices jumped.
ECB hikes rates by 50 bps in fight against inflation
The ECB raised higher-than-expected interest rates on Thursday, confirming that concerns about runaway inflation stymied economic growth views for now.
The ECB raised its benchmark deposit rate by 50 basis points to 0 percent, breaking its earlier guidance for a move of 25 basis points, as it joined global peers in raising borrowing costs. This was the eurozone central bank’s first rate hike in 11 years.
Ukraine keeps key interest rate unchanged, raises inflation forecast
Ukraine’s central bank on Thursday kept its main interest rate unchanged at a seven-year high of 25 percent and raised its 2022 inflation forecast to more than 30 percent.
Devastated by war with Russia, Ukraine’s economy fell nearly 40 percent year over year in the second quarter of this year, the central bank said, adding that it may keep the key rate at 25 percent by the second quarter of 2024.
Japan’s June exports up 19.4 percent year-on-year
Japan’s exports rose 19.4 per cent in June from a year earlier, data from the Ministry of Finance (MoF) showed on Thursday.
This compares with a rise of 17.5 percent expected by economists in a Reuters poll.
June imports grew by 46.1 per cent year-on-year, as against the average estimate of 45.7 per cent growth.
The trade balance came in at a deficit of 1.3838 trillion yen ($10.00 billion), versus the average estimate of a deficit of 1.510 trillion yen.
UK budget deficit widens as inflation rises
Rising debt costs – pushing inflation to double the previous monthly peak – added to the UK budget deficit in June, the highest since April 2021, data showed on Thursday.
The Office for National Statistics said net borrowings from the public sector excluding state-owned banks rose to 22.879 billion ($27.4 billion) last month, from 12.560 billion pounds in May.
Sri Lanka’s inflation hits 59 per cent year-on-year in June
According to data released by the country’s statistics department on Thursday, Sri Lanka’s headline inflation rate reached 59 percent in June.
The country’s national consumer price index LKNCPI=ECI rose by 58.9 percent year-on-year in June, as against 45.3 percent in May.
(with input from Reuters)