By Geoffrey Smith
Investing.com -- The European Central Bank raised its three official interest rates by 75 basis points each, its biggest ever single move in interest rates, in an effort to bring record high inflation back under control.
The Frankfurt-based central bank raised its key deposit rate, which provides the effective floor for money-market rates, to 0.75%, while the refinancing rate rose to 1.25% and the overnight lending rate to 1.50%.
The move is at the top end of expectations ahead of the Governing Council's meeting. Many analysts - including the bank's own chief economist Philip Lane, had warned that the Eurozone economy was facing an ever more likely recession due to the war in Ukraine and, to a lesser extent, the knock-on effects of pandemic-era stimulus.
All three rates still remain well below the current rate of inflation, which hit a new euro-era record of 9.1% in August.
"Based on its current assessment, over the next several meetings the Governing Council expects to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations," the ECB said in a statement detailing its decisions.