The European Central Bank raised the benchmark interest rate on Thursday to 2.5%, in a decision that reflects the growing concern of monetary policymakers regarding the economic developments in the euro area.
Christine Lagarde, ECB President, did not dispel the taboo about a possible departure from the position, leaving the question about her future at the helm of the central bank without a clear answer. The uncertainty about her continuity remains open.
Regardless of the outcome of ECB leadership, financial markets anticipate a new interest rate hike in December, which suggests that investors expect interest rates to continue rising in the short term.
Lagarde revealed that central bankers are seriously concerned about the risks of the energy shock spreading throughout the economy, signaling that the ECB remains focused on combating inflation, even if that entails significant costs for economic activity.
