ECB rate hike: 'The price to pay for crushing the inflation dragon'

Unprecedented hike of 0.75%

Elliot Gulliver-Needham
clock • 3 min read

Following the historic decision of the European Central Bank to raise interest rates by 0.75%, analysts have said that despite potentially worsening an expected recession on the continent, “this is the price to pay for crushing the inflation dragon”.

Seema Shah, chief global strategist at Principal Global Investors, noted that the rate hike was "the largest in the single currency area's history, that comes despite the oncoming recession and is testament to the enormity of the inflation challenge facing the central bank". Gurpreet Gill, macro strategist, global fixed income at Goldman Sachs Asset Management, agreed, stating that "not too long ago, a 0.75% increase in the policy rate would have been considered a complete hiking cycle in the Euro area". Shah added: "With inflation at a record high and almost five times greater than t...

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