The ECB keeps interest rates unchanged and will end its emergency program against the pandemic in March

The rate hike in the euro zone will have to wait.

The

(ECB) has confirmed what the market has already been discounting and that is that it will not join other large central regulators, such as the

(Fed) or the

when raising the price of money.

The entity is concerned about inflation, but maintains the thesis that it will be temporary and prefers to continue propping up the lagged recovery in the Eurozone.

This explains not only the inaction in terms of interest rates, but also the readjustment in the main debt purchase programs that it maintains assets. On the one hand, it will end

(PEPP) in March 2022, but during the following six months it will increase purchases under its standard asset purchase program (

).

Specifically, the monthly net purchase rate will increase to 40,000 million euros in the second quarter and up to 30,000 million per month in the third quarter. As of October 2022, the Governing Council will maintain the net purchases of assets under the APP at a monthly rate of

, as stated in the statement issued at the end of the December meeting in Frankfurt. Furthermore, the Governing Council "expects net purchases to end shortly before key ECB interest rates begin to rise."

Regarding rates, the entity chaired by Christine Lagarde maintains the reference rates at 0% for its financing operations;

the deposit facility rate at -0.50%, and the loan facility rate at 0.25%.

"The Governing Council judges that the advances in the economic recovery and towards its inflation target in the medium term allow to reduce step by step the rhythm of its asset purchases during the next quarters. But a monetary accommodation is still needed so that inflation stabilizes at the inflation target of 2% ", points out the entity, hence" given the current uncertainty ", the ECB is committed to" maintaining flexibility "in its actions.

Uploads in UK

Shortly before the ECB's statement, the Bank of England's Monetary Policy Committee announced its decision to raise the reference interest rate for its operations by 15 basis points, which will now stand at 0.25%.

The institution, however, has kept the volume of its purchase programs unchanged at 895,000 million pounds (1.05 billion euros).

The decision to undertake the rise in interest rates from the historical low of 0.1% to 0.25% was adopted by a majority of 8 votes to 1, since

voted against the increase, preferring to maintain the rate at 0.1%, while the nine members of the Committee supported continuing with the same volume of purchases.

In its analysis, the Bank of England takes note of the

, noting that it appears to be much more transferable than previous ones, posing new risks to public health and causing a drop in global prices of risk assets. , although later they have recovered to a great extent.

Regarding

, which in November reached 5.1%, its highest level since September 2011, the central bank expects it to remain around 5% for most of the winter period and reach a maximum of around 6% in April 2022, although it maintains confidence that inflation will decline in the second half of next year.

inflation target of 2% in a sustainable way, "he added.

According to the criteria of The Trust Project

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