The European Central Bank slowed its record pace of interest rate increases slightly Thursday but promised that more hikes are on the way, joining the U.S. Federal Reserve and other central banks in reinforcing an inflation crackdown despite some recent headway against the high prices that are plaguing consumers.
The ECB, Bank of England and Swiss National Bank dialed back their increases to half a percentage point from three-quarters in a blitz of central bank action Thursday, as did the Fed a day earlier.
She said rates could go up at a pace of a half-percentage point per meeting "for a period of time." Increases that big were rare before the current burst of inflation stemming from Russia's invasion of Ukraine and the higher energy prices it caused. Inflation recently has made small declines from painfully high levels in many economies. But officials are underlining that inflation is not yet corralled from decade highs and more must be done to wrestle down price spikes for energy, food and housing that are ravaging people's finances.
The ECB's hike follows record increases of three-quarters of a point in July and October. Half-point hikes are still bigger than the usual quarter-point moves before the recent bout of price spikes. Two straight quarters of contraction is one definition of a recession, although the economists on the eurozone business cycle dating committee use a broader range of data such as unemployment and the depth of the downturn.
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