The European Central Bank raised interest rates on Thursday to 3.75 per cent – following the lead of the US Federal Reserve – in its battle against inflation. Weaker domestic demand and high inflation are dampening supply and weighing on manufacturing. “High inflation and tighter financing conditions are dampening spending. So we might hike and we might hold.”Ms Lagarde said that if the bank pauses interest rate increases, “it would not necessarily be for an extended period of time”. Fed chairman Jerome Powell was equivocal about whether there was one more policy rate rise left this year and said the banking regulator's staff were no longer forecasting a recession.

Source: Ethiopian News July 27, 2023 13:26 UTC