Unlike the U.S. Federal Reserve, the European Central Bank (ECB) decided to raise borrowing costs agai✨n on Thursday in an effort to bring down inflation.

The ECB increased its three key interest rates by 25 澳洲幸运5官方开奖结果体彩网:basis points (bps), bringing its main rate to 3.5%, the highest it’s been in 22 years. The bank has moved rates up at each of its meetings since last July.  

The ECB’s Governing Council said the decision was based on “an updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of 澳洲幸运5官方开奖结果体彩网:monetary policy transmission."

The bank lifted its expectation of headline inflation to an average 5.4% this year, 3% next year, and 2.2% in 2025. That’s a gain of 0.1 percentage point on all three from its outlook in March. Like the Fed, the ECB’s 澳洲幸运5官方开奖结果体彩网:target rate is 2%.

The ECB added that its future decisions will be based on ensuring that monetary policy would be sufficiently restrictive to achieve a “timely return” to the 2% level, and “will be kept at those levels for as long as necessary.” President 澳洲幸运5官方开奖结果体彩网:Christine Lagarde indicated that another hike i𝓀n July is "very likely."

The bank also lowered its outlook for economic growth this year to 0.9% from the previous 1%, and 1.5% f꧒rom 1.6% in 202﷽4. It held steady the 2025 prediction of 1.6% expansion. 

Yesterday, the Fed paused its rate hike cycle for the first time since policymakers began tightening in March 2022. However, the members indicated that more increases would be needed later this year.