We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
LAST UPDATE | 9 Jun 2022
THE EUROPEAN CENTRAL Bank has said it will raise its key interest rates for the first time in over a decade at its July 21 meeting.
It expects inflation to remain “undesirably elevated for some time” and forecast it to soar to 6.8 percent in 2022, before easing to 3.5 percent in 2023 and 2.1 percent in 2024.
The announcement comes as Ireland records the largest annual increase in the consumer price index since 1984, with costs rising by an average of 7.8%.
The ECB’s previous projections in March had seen consumer price rises reaching 5.1 percent in 2022, 2.1 percent in 2023 and 1.9 percent in 2024.
With the eurozone under pressure from record-high inflation, the interest rates would rise by 25 basis points.
The ECB left open the possibility that it would make a more drastic, half-percentage-point increase in September rather than the more usual quarter-point adjustment, saying that if the inflation outlook persists or deteriorates, “a larger increment will be appropriate at the September meeting”.
Bank President Christine Lagarde said the increases would not be the last. She said the rate-setting council anticipates “a gradual but sustained path of further increases” after September.
The US Federal Reserve raised its key rate by a half-point on May 4 and has held out the prospect of more such large increases. The Bank of England has approved rate hikes four times since December.
The prospect of rapid increases has sent shudders through stock markets, as higher rates would raise the returns on less risky alternatives to stocks.
Rate hikes in Europe also are complicated by weakening prospects for growth as Russia’s war in Ukraine sends shock waves through the economy, particularly through rising energy prices.
Higher rates can make credit more expensive for businesses. The bank said in a policy statement, however, that the path of increases would be “gradual but sustained”.
“High inflation is a major challenge for all of us,” the statement said. “The governing council will make sure that inflation returns to its 2% target over the medium term.”
By raising its benchmarks, the bank can influence what financial institutions, companies, consumers and governments have to pay to borrow the money they need. So higher rates can help cool off an overheating economy.
But higher rates can also weigh on growth. That makes the ECB’s job a delicate balance between snuffing out inflation and blunting economic activity.
The ECB on Thursday slashed its growth projection for this year to 2.8% from 3.7%.
It raised its outlook for inflation, saying that price increases would average 6.8% this year, higher than the 5.1% in its March forecast. It also upped the crucial forecast for 2024 — to 2.1% from 1.9%.
That is significant because it indicates the bank sees inflation as above target for several years, a strong argument for more rate increases.
An ECB move to attack inflation has raised concerns about the impact of higher interest rates on heavily indebted governments, most notably Italy. The bank announced no new support measures that could help such countries, saying only that it would respond flexibility if some parts of the eurozone were facing excessive borrowing costs.
The rate hikes end an extended period of extremely low rates that started during the global financial crisis, which broke out in 2008.
The increases will start from record lows of zero for the ECB’s lending rate to banks and minus 0.5% on overnight deposits from banks.
With reporting by the Press Association and Eoghan Dalton
To embed this post, copy the code below on your site
Anyone sad enough to watch deserves liver failure!!
People like drinking and getting really drunk, it’s fun. This is a reality.
i agree, but recently i have become worried that i might have bowel cancer, coz an ad on the telly told me to
Tallafornia is enough to turn people off drinking.
I watched a minute to see what it was about. It was enough for me to think about removing my tv altogether…..scumbags on tv
to be honest, I these shows are more about being scripted than reality TV. I seriously doubt it it true to real life, and I seriously doubt the majority of Irish youth would idolise such behaviour
Em, actually I’d say if you found yourself in a dublin nightclub in the early hours of a saturday morning, you might realise that a lot of Irish youth try to emulate such behaviour. My only point would be, that shows like this might show people how stupid they look when they get that drunk and act like that!
But Antoinette are they not people who are already drunken knobs? It’s not a TV show that is making them behave that way.
Maybe they should be made drink their own fake tan.
I don’t watch any of this tripe. But if watching them influences how you drink at home, then I’m pretty sure there is no hope for you in the real world.
I think Soaps are really bad for it too, time was when something happened they put the kettle on! Now after a murder or a fire they all break open the Ernest and Gallo.
Now to someone may watch Eastenders and go I wish I was like that moderately attractive single Mum with a sister in prison and no real prospects in life. They might just about. But who would watch the cretins on Tallafornia and think to themselves that they want to be like one of them? Does anyone really?
Unfortunately yes. They didn’t just make these people up. we’ve all known a few in our time.
Ive known some alright but they didn’t end up like that from watching a TV show, they were always knobs. Do you really think many people watching Tallafornia really aspires to that?
No they set a bad example for human existence period.
No they promote sterilisation and euthanasia!!
I think it sets a bad example for how to live your life….
Seems like wine companies have big share of eastenders and Corey street scripting. Glass of red is the new fag break.
Biggest load of crap ever put on the telly watched 5 mins to much of it!
I said that BLEEEEP also had a penchant for a few BLEEEEPS himself and it was kinda hypocritical to be calling BLEEEEP drink sodden.
Agh hey did it again!
“Your Say” Unless we don’t like your comment. Then it’s deleted without explanation.
What’d you say?
It would make you turn to drink just thinking about all the people who watch it religiously and talk about it all week. Fucking pathetic morons.
People drink at home cus it’s too expensive to drink out !!! I would much rather sit at home with friends and have a good natter and a laugh then sit in a smelly night club wer ya spend about 100 euro on a few drinks !! Bottle of vodka from Aldi and a bottle of coke 20euro !!! That’s why I drink at home anyway!!
and I do like a drink on Friday evening I work hard and deserve it !
I dont worry about myself of course!
but there’s no doubt that its peddling an infinitely watchable bad behaviour stereotype that appeals to 16-22 year olds! which is bad example and bad ethics – but more importantly its rubbish television!
‘twould drive ya to the drink if you gave it the time of day
ha ha WILLIAM ! BRILL i agree totally !!!!!!!!!!!!!! pass me a kag and a carafe of wine S T A T !! lol
have your say