ECB raises interest rates sharply

A turning point for the European Central Bank: In its first interest rate hike in eleven years, the ECB is taking an unexpectedly strong step to combat ever-rising inflation. The monetary guardians around ECB President Christine Lagarde decided on Thursday to raise the key interest rate by half a percentage point to 0.50 percent. The ECB also increased the deposit rate by the same amount – to 0.00 percent. This means that banks no longer have to pay extra when they park excess money at the ECB. The interest rate hike was twice as high as the ECB had recently announced. With this step, the ECB is initiating a comprehensive turnaround in its monetary policy.