Governing Council meeting, ECB 14/09/2023 Governing Council meeting, ECB. 14th September 2023 ECB raises rates by a further 0.25% The ECB’s Governing Council raised all three of its key interest rates by a further 0.25% at its meeting on 14th September in what can be described as a dovish hike. This is the tenth back-to-back increase in the cost of borrowing in the space of less than a year, with the main refinancing fixed rate having now risen by 450bps to 4.5% in total – a 22-year high and an unprecedented cycle of tightening. Consumer price inflation stood at 5.3%…

Governing Council meeting, ECB 27/07/2023 Governing Council meeting, ECB. 27th July 2023 ECB raises rates by a further 0.25% The ECB’s Governing Council raised all three of its key interest rates by a further 0.25% at its meeting on 27th July, as widely expected. This is the ninth back-to-back increase in the cost of borrowing in the space of less than a year, with the main refinancing fixed rate having now risen by 425bps to 4.25% in total – an unprecedented cycle of tightening. Consumer price inflation is falling, with the annual rate standing at 5.5%, the lowest reading since…

Governing Council meeting, ECB 15/6/2023 Governing Council meeting, ECB. 15th June 2023 ECB raises rates by a further 0.25% Emphasising that inflation had remained “too high for too long”, the ECB’s Governing Council raised all three of its key interest rates by a further 0.25% at its meeting on 15th June. Prices rose by 6.1% in the year to May, a notable reduction on April’s reading of 7% and the lowest rate of inflation since February 2022. Nonetheless, in the words of ECB Christine Lagarde, in the following press conference, “the journey to get there is not over. We will…

Governing Council meeting, ECB 4/5/2023 Governing Council meeting, ECB. 4th May 2023 ECB raises rates by a further 0.25% The ECB’s Governing Council raised all three of its key interest rates by a further 0.25% at its meeting on 4th May. The press release accompanying the announcement reiterated the ECB’s commitment to bring inflation down to its 2% target prompting Christine Lagarde, ECB president, to comment “We are not pausing, that is extremely clear” while noting that some of the Governing Council had backed a bigger rise of 50bps., which implied that this may not be the last rate hike.…

Governing Council meeting, ECB 16/3/2023 Governing Council meeting, ECB. 16th March 2023 ECB raises rates by a further 0.5% in spite of banking sector worries      The ECB’s Governing Council raised all three of its key interest rates by a further 0.5% at its meeting on 16th March. Since July 2022, the cost of borrowing on its main refinancing fixed rate has risen by 350bps to 3.5%  in total – an unprecedented cycle of tightening. Although inflation dipped slightly, from 8.6% in the year to January to 8.5% a month later, the Governing Council stressed that it was “projected to…

Governing Council meeting, ECB 2/2/2023 Governing Council meeting, ECB. 2nd February 2023 All lending rates increased by a further 0.5%       The ECB’s Governing Council held its first meeting of the year on 2nd February and, as widely expected, voted further to hike the cost of borrowing by a further 0.5%. Since June, the cost of borrowing has risen by 3% in total. In the press conference following the meeting, Christine Lagarde, the ECB’s President stated that a further 0.5% increase is likely at the next meeting of the Governing Council, scheduled for 16th March. She also confirmed plans to…

Federal Open Market Committee 1/2/2023 Federal Open Market Committee meeting, US Fed. 31/01-01/012/2023 Fed Funds rate increased by just 0.25%.       The Federal Open Market Committee voted unanimously to increase the Fed Funds Rate by 0.25% during its first meeting of 2023. In the space of a year the cost of borrowing has now been raised from zero to 4.5% – 4.75% and now stands at its highest level since 2007. After scaling back from a run of 0.75% increases to 0.5% in December, the FOMC was unanimous in backing a smaller increase in borrowing costs, but Chairman Jerome Powell…

Governing Council meeting, ECB 15/12/2022 Governing Council meeting, ECB. 15th December 2022 All lending rates increased by a further 0.5%       The ECB’s Governing Council held its final meeting of the year on 16th December and, as widely expected, voted further to hike the cost of borrowing. Like the US Federal Reserve and the Bank of England, the members voted for a smaller rate increase – 0.5% as opposed to the 0.75% rate rise announced on 27th October. Since June, the cost of borrowing has risen by 2.5% in total. In the press conference following the meeting, Christine Lagarde, the…

Governing Council meeting, ECB 27/10/2022 Governing Council meeting, ECB. 27th October 2022 All lending rates increased by a further 0.75%       The ECB’s Governing Council met on 27th October and voted to raise the cost of borrowing by 0.75%. This decision comes only seven weeks after the previous meeting which also hiked rates by 0.75%. Since June, the cost of borrowing has risen by 2% in total.  In the press conference which followed the meeting, Christine Lagarde, the ECB’s President indicated that further rate rises could be expected before the end of 2022. Klaas Knot, the head of the Dutch…

Governing Council meeting, ECB 8/9/2022 Governing Council meeting, ECB. 8th September 2022 All lending rates increased by 0.75%       Six weeks after the first rate hike in 11 years, the ECB raised the cost of borrowing by a further 0.75% following the meeting of its Governing Council on 8th September. The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 1.25%, 1.50% and 0.75% respectively, with effect from 14th September. This sharp monetary tightening has been driven by a desire to bring consumer price inflation…

Governing Council meeting, ECB 21/07/2022 Governing Council meeting, ECB. 21st July 2022 First rate rise in 11 years       As announced at its previous meeting, the ECB raised interest rates for the first time in 11 years following the meeting of its Governing Council on 21st July. The increase in the main policy rate, however, was 0.5% rather than the 0.25% it had previously indicated. The deposit rate, which had been reduced below zero as far back as 2014, was also increased by 0.5%, taking it up to 0%. The ECB also announced the approval of the Transmission Protection Instrument…

Governing Council meeting, ECB 9/6/2022 Governing Council meeting, ECB. 9th June 2022 First rate rise to take place in July       The ECB’s Governing Council met on 9th June and announced that it will implement its first rate hike in 11 years after its next meeting, which is scheduled for 21st July. Interest rates will be increased from 0% to 0.25%. It also stated that rates could be raised further after its September meeting and that the increase could be more substantial if inflation remains a problem. The ECB also confirmed that the 2019 Asset Purchase Scheme (APS) will be…

Governing Council meeting, ECB 14/4/2022 Governing Council meeting, ECB. 14th April 2022 ECB to taper the APP as well as ending PEPP at the end of March Bucking the trend of most central banks in advanced Western economies, the Governing Council of European Central Bank voted to keep interest rates at 0% at its meeting on 14h April. The ECB confirmed that the 2019 Asset Purchase Scheme is likely to be terminated in the third quarter of the year and that the monthly purchases will be increased from €20b. to €40b. in April, with €30b. to be purchased in May…

Governing Council meeting, ECB 10/3/2022 Governing Council meeting, ECB. 10th March 2022  ECB to taper the APP as well as ending PEPP at the end of March      At its meeting on 10th March, the Governing Council of European Central Bank announced a revision to the increase in the amount of assets purchased under the 2019 Asset Purchase Scheme. Initially, the monthly purchases were to be increased from €20b. to €40b. for three months starting in April to offset the termination of the Pandemic Emergency Purchase Programme at the end of March. Now the plan is for the rise to…

Governing Council meeting, ECB 16/12/2021 Governing Council meeting, 16th December 2021 ECB to taper asset purchases but leaves interest rates unchanged       The Governing Council of European Central Bank decided to scale back its asset purchases under the Pandemic Emergency Purchase Programme (PEPP) from January 2022 onwards. It is planned to terminate the programme on schedule in March 2022. The assets will be reinvested until at least the end of 2024 – in other words, there will be no “quantitative tightening” for at least three years. The separate monthly asset purchases, introduced in 2019, are set to continue throughout the…

Governing Council meeting, ECB 28/10/2021 Governing Council meeting, ECB. 28th October 2021 ECB to continue with asset purchases as inflation hits 13-year high       The Governing Council of European Central Bank decided to continue with its very accommodative monetary policy at its meeting on 28th October, even though the following day, September’s inflation figures were released, showing that consumer prices were rising at an annual rate of 4.1%, the highest reading in over 13 years. At the ensuing press conference, ECB President Christine Lagarde and her deputy Luis de Guindos acknowledged the increase in inflation, which they expect to rise…

Governing Council meeting, ECB 9/9/2021 Governing Council meeting, ECB. 9th September 2021 ECB to slow the rate of asset purchases       With the Eurozone economy growing by 2.2% in the second quarter of 2021, the Governing Council of European Central Bank decided at its meeting on 9th September to slow the rate of its asset purchases under the PEPP (Pandemic Emergency Purchase Programme). ECB President Christine Lagarde, when questioned at the press conference following the meeting, did not specify the actual amount by which the purchases would be reduced. Instead, she stressed that the purchases would be at a “moderately…

Governing Council meeting, ECB 22/07/2021 Governing Council meeting, ECB. 22nd July 2021 ECB assumes June’s fall in inflation means that it won’t be a problem.       On 22nd July, the Governing Council of European Central Bank met for the first time since the announcement of a change to its inflation target in its strategy review. Instead of aiming for inflation to be “below but close to 2%”, the new objective will be for a symmetric inflation target of 2%. There were no new announcements, although the Governing Council reaffirmed its commitment to step up the purchase of assets under the…

Governing Council meeting, ECB 10/6/2021 Governing Council meeting, ECB. 10th June 2021 ECB to increase its asset purchases     On 10th June, the European Central Bank reaffirmed its commitment to continue with the €1,850b. Pandemic Emergency Purchase Programme (PEPP) until at least the end of March 2022, or until it judges that the coronavirus crisis phase is over. The Governing Council announced that it would step up the purchase of assets in the forthcoming months. This announcement may seem rather déjà vu as the Council made a similar commitment back in March but did not follow it through. Today’s  press…

Governing Council meeting, ECB 22/04/2021 Governing Council meeting, ECB. 22nd April 2021. ECB to increase the pace of asset purchases     On 22nd April, the Monetary Policy Committee of European Central Bank unsurprisingly announced no new measures, but reaffirmed that the monetary loosening initiatives of 2020 launched in response to the coronavirus pandemic will continue. The asset purchase programme will continue until at least March 2022 and will be conducted at a higher pace than has been the case in the first quarter of the year. No run off of the assets is planned until the end of 2023 at…

Governing Council Meeting, European Central Bank 11/3/2021 ECB to increase its asset purchases On 11th March, the European Central Bank announced that it would continue with the €1,850b. Pandemic Emergency Purchase Programme (PEPP) until at least the end of March 2022, or until it judges that the coronavirus crisis phase is over. No new monetary initiatives were announced, but the Governing Council announced that it would step up the purchase of assets. Although it has committed to this huge amount, having raised the total it planned to purchase from €1,350b. to €1,850b in December, it has not actually been buying…

Governing Council meeting, ECB 10/12/2020 Governing Council meeting, ECB. 10th December 2020 ECB boosts asset purchase programme by €500b.    On 10th December, the European Central Bank announced an expansion of its Pandemic Emergency Purchase Programme (PEPP). The amount of assets to be purchased will increase from €1,350b. to €1,850b. This is in addition to the asset purchase programme launched in late 2019, before the pandemic, which will continue at its current rate of €20b, along with further purchases under an additional scheme worth €120b. in total. These assets too will be reinvested until the ECB feels ready to raise…

ECB Governing Council 29/10/2020   ECB Governing Council 29th October 2020 No new initiatives from ECB as Eurozone economy slows Prices fell by 0.3% in the year to September across the 19-member bloc, which is a  worry several members of the MPC. Given the high money growth, any deflation is likely to end rapidly once the worst of the pandemic is over and the economy reopens. The latest broad money figures for the Eurozone saw the annualised rate of broad money growth rise to 8.7% in the three months to September. Broad Money grew by €156b. during the month, a…