The ECB raised its rate by 25 basis points on Thursday, July 27. The changes will already take effect on Wednesday, August 2. The refinancing rate was raised to 4.25%, while the deposit rate was raised to 3.75%.
The 3.75% deposit rate was the highest since 2000 when euro coins and notes had not yet been introduced. In response to complaints about the ECB's slow reaction to the first rises in inflation last year, ECB President Christine Lagarde said the institution was determined to "break the back" of inflation.
In general, economists believe that interest rate hikes have come to an end: there is now a discussion about whether further rate hikes are appropriate. The problem is that inflation is coming down too slowly.
There has been a chain reaction in other sectors of the economy from the initial growth in the energy sector. There are concerns that high inflation will continue into 2025.