ECB hikes by 25bp says inflation outlook remains 'too high for too long'
The European Central Bank went ahead and hiked interest rates again, noting that the inflation outlook continued to be too high for too long.
But the lags in policy transmission to the economy were uncertain, so the governing council would continue to act in a data-dependent manner, the ECB said in its policy statement.
It added that headline consumer prices had continued to slow in recent months, but inflation pressures at the core level remained "strong".
"The Governing Council’s future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary," it said.
"[...] the Governing Council’s policy rate decisions will continue to be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission."
The interest rate on the main refinancing operations, the marginal lending facility and the deposit facility would all be increased by 25 basis points to 3.75%, 4.00% and 3.25%, respectively, with effect from 10 May 2023.
As of 1339 BST euro/dollar was trading down by 0.41% to 1.102.