ECB raises interest rate by 75 basis points to combat inflation

The European Central Bank (ECB) has increased on Thursday a 75-basis point interest rate to combat inflation despite heightened concern over bleak economic prospects, according to Bloomberg.

The bank has raised the interest rate three times since July, similar to other central banks around the world, it also tightened the conditions for low-interest bank loans.

ECB has warned eurozone governments not to increase their public debt burdens as authorities sought to relieve pressure on households and business activities owing to the dramatic rise in energy prices.

“Governments should pursue fiscal policies that demonstrate their commitment to gradually reduce high public debt,” ECB’s president Christine Lagarde, said.

Lagarde added that policymakers should choose temporary measures targeting the most vulnerable categories.

Moreover, she noted that eurozone’s short-term prospects for economic growth tended to decline while inflation was rising, against the backdrop of Ukrainian war’s affecting economic activity.