The central banks of the U.K., eurozone and Switzerland increased interest rates by 0.5 percentage point, following the Federal Reserve in slowing the pace of increases as inflation edges lower across advanced economies.
The European Central Bank said in a statement it would raise its key rate to 2% from 1.5%, as expected, the highest level since 2009. In a hawkish twist, the ECB said it expected “to raise [rates] significantly further, because inflation remains far too high and is projected to stay above the target for too long.” The bank also said it would reduce its multitrillion-dollar bondholdings starting in March, by €15 billion, equivalent to $16 billion, a month on average at first.
