The European Central Bank is likely to raise interest rates by 0.75 percentage points next month ahead of a further move in December to a level that no longer stimulates economic growth, several of its policymakers said on Wednesday.
“We will do what we have to do, which is to continue hiking interest rates in the next several meetings,” ECB president Christine Lagarde told an Atlantic Council event in Frankfurt, adding that the bank’s “first destination” was to lift rates to the “neutral rate” that neither boosted nor restricted growth.
The ECB has raised its deposit rate at its past two meetings from minus 0.5 per cent to 0.75 per cent in an effort to tackle record eurozone inflation. But Lagarde said this level was still below the neutral rate, which officials have estimated is 1-2 per cent in the euro area.