Worthy Christian News > World News > Eurozone interest rate rises to highest level ever

Eurozone interest rate rises to highest level ever

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – As of Thursday, twenty Eurozone countries have the highest interest rate ever recorded since the Euro was launched in October 2000, Sky News reports.

The European Central Bank (ECB) on Thursday raised its benchmark rate to 3.75%, up 0.25 percentage points, making borrowing more expensive as inflation stood at 5.5% in the year up to June, Sky News reports. Thursday’s was the ninth consecutive interest rate hike in the zone.

Interest rates are raised to make borrowing more expensive, lower demand and make price rises more difficult to pass on: like other regions, the Eurozone has suffered rising food and energy prices.

The ECB said in a statement Thursday that while inflation was continuing to come down, it was still expected to remain “too high for too long,” the BBC reports. “Inflation will drop further over the remainder of the year but will stay above target for an extended period,” the ECB said.

The UK has seen its Interest rates raised to 5%, and this rate is expected to be increased further as inflation remains high, Sky News said. Meanwhile, the US central bank on Wednesday raised interest rates to their highest level in 22 years in an effort to control prices.