The European Central Bank on Thursday finally joined the inflation battle, and surprisingly credited President Christine Lagarde with a half-point increase in the interest rate. Especially since the resignation of Mario Draghi as Italian prime minister on the same day highlights the risks the ECB thinks it still needs to manage.
The move is the ECB’s first rate hike in 11 years, and is accompanied by a negative deposit rate at the end of eight years that was as recently as minus 0.5%. Until a media leak this week, the central bank had all but bound for a quarter-point increase now and another in September.
opinion | ECB picks up while Mario Draghi falls
The European Central Bank on Thursday finally joined the inflation battle, and surprisingly credited President Christine Lagarde with a half-point increase in the interest rate. Especially since the resignation of Mario Draghi as Italian prime minister on the same day highlights the risks the ECB thinks it still needs to manage.
The move is the ECB’s first rate hike in 11 years, and is accompanied by a negative deposit rate at the end of eight years that was as recently as minus 0.5%. Until a media leak this week, the central bank had all but bound for a quarter-point increase now and another in September.