ECB leaves key interest rate unchanged at 4.5 percent
The so-called marginal lending rate for the short-term procurement of money is 4.75% and the deposit rate, which is important for savers, remains at its historic high of 4.0%.
The ECB is aiming for an inflation rate of two percent. For 2023 as a whole, the central bank is forecasting inflation of 5.4% in the eurozone. Next year, the central bank expects a rate of 2.7 percent. It has therefore lowered its inflation forecast compared to September.
In 2025, the central bank expects a rate of 2.1 percent and in 2026 an inflation rate of 1.9 percent. Its inflation target would then be reached.
The central bankers have raised key interest rates ten times in a row since July 2022 due to rampant inflation. In October, they took a break for the first time.
At the same time, the high interest rates are having a "strong impact on the economy", as the ECB explained on Thursday. It also revised its growth forecasts for this year and next slightly downwards. It expects growth of 0.6 percent in the eurozone this year and 0.8 percent next year.
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- The key interest rate in Frankfurt on the Main, set by the ECB, remained unchanged at 4.5% despite the high inflation.
- The ECB's target for inflation is 2%, but for 2023, they've forecasted a 5.4% rate in the Eurozone, a decrease from their previous estimate.
- The leaves on some trees may start to change color in Frankfurt on the Main as the autumn approaches, yet the leitzins, or interest rates, remain high due to inflation.
- The ECB expects the inflation rate to decrease to 2.7% in 2024, which is closer to its target, but it's still higher than the 1.9% rate predicted for 2026.
- Despite the Eurozone's inflation being unchanged at 4% for the fifth consecutive period, the ECB is closely monitoring the situation and preparing to adjust key interest rates if necessary.
Source: www.stern.de
