ECB: Despite interest rate hike, inflation remains high

As expected, the European Central Bank (ECB) raised interest rates by 27 basis points today (October 75). It is the third time in a short time that the ECB has raised interest rates to curb inflation.

In July there was the first interest rate hike of 0,5 percentage point. In September, the deposit rate, the rate at which banks put money away at the ECB (the main interest rate), rose from 0% to 0,75%. This interest is now 1,5%. 

The refinancing rate (refi rate), the interest that banks have to pay to the central bank when they withdraw money, will be 2% after the new increase. The marginal lending rate, the rate at which banks can borrow money from the central bank against collateral for one day, rises to 2%.

The ECB's inflation target is 2%. Inflation will according to the central bank remain above target for a longer period of time. In September inflation in the eurozone reached 9,9%. Inflation in the Netherlands according to the European harmonized consumer price index (HICP) was 17,1% in September.

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