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  • Writer's pictureBy The Financial District

ECB To Raise Interest Rates Further

The European Central (ECB) Bank is all but certain to raise borrowing costs to their highest level in 22 years on Thursday and leave the door open to more hikes, extending its fight against high inflation even as the eurozone economy flags, Francesco Canepa and Balazs Koranyi reported for Reuters.

Photo Insert: Inflation in the eurozone is still unacceptably high for the ECB at 6.1%.

Growth across the 20 countries that share the euro is at best stagnating and inflation has been moderating for months, courtesy of lower energy prices and the steepest increase in interest rates in the ECB's 25-year history.

Furthermore, the US Federal Reserve broke a string of 10 successive rate hikes late on Wednesday, a signal for investors around the world that the current tightening cycle across developed economies is nearing an end, even if more US rate hikes are still possible.

But inflation in the eurozone is still unacceptably high for the ECB at 6.1% - more than three times its 2% target - and underlying price growth, which typically excludes food and energy, is only starting to slow.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

That is likely to keep the ECB on the tightening path, particularly after it failed to predict the current bout of high inflation and began raising rates later than many global peers last year.

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