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Essentials of Monetary Policy

Central Banks in Europe

December 15, 2022
Hendrix Vachon
Principal Economist

Monetary Tightening Continues in Europe, With 50 Bps Rate Hikes in the Eurozone and the United Kingdom

  • On the heels of Fed Day, today saw a fresh batch of monetary policy announcements from several European central banks. It’s clear inflation remains a global challenge that will require continued interest rate rises in many countries.
  • Despite a slowdown in the pace of monetary tightening from the European Central Bank, it remains committed to continued rate hikes. It seems fairly likely that it will announce at least two more 50 bps increases in 2023, bringing the main refinancing operations rate to 3.50% by the end of the first quarter.