The head of the European Central Bank Christine Lagarde, speaking to the European Parliament, confirmed that the regulator will keep high interest rates for a long period, hoping to reduce inflation to the target values of the eurozone. According to Lagarde, adjusting the base rate at a level similar to the crisis will help eurozone inflation reach 2.1% by 2025. On September 14, the ECB raised all key rates by 0.25 percentage points, which was the tenth consecutive such decision since last summer. Now the rate on the main financing operations is at the level of 4.5%, on deposits – 4%, and on margin loans – 4.75%. This is comparable to the levels of the crisis of the early 2000s. In general, the regulator forecasts inflation in 2023 at 5.6%, in 2024 – 3.2%, and in 2025 – 2.1%. Economic growth in the European Union is expected to slow down to 0.7% in 2023, accelerate to 1% in 2024, and to 1.5% in 2025. This week, it is worth paying attention to the publication of preliminary data on September inflation in Germany, France and the entire eurozone. Experts believe that the dynamics of inflation will determine the duration of the current ECB policy on rates.
