The European Central Bank (ECB) is raising interest rates again.

The central bank announced this on Thursday after the February meeting of the ECB Council.

The central bank is once again taking a big interest rate step: the key interest rate is being raised by 0.5 percentage points.

This is the ECB's fifth rate hike in a row.

Economists praised the step in a first reaction - but also pointed out that the ECB needed staying power.

Christian Siedenbiedel

Editor in Business.

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The hawks, the supporters of a tighter monetary policy, have apparently once again prevailed in the ECB Council.

That was expected - the next decision in March could be more controversial.

ECB President Christine Lagarde, who said when she took office that she wanted to be neither a hawk nor a dove (those are the proponents of a loose monetary policy), but rather a wise owl, had recently attracted attention with hawkish statements.

She had repeatedly stressed: "We need to bring down inflation - and we will achieve this goal."

Inflation in the euro zone had recently fallen slightly due to lower energy prices, to 8.5 percent in January.

It was still a long way from the ECB's target of 2 percent.

In addition, the so-called core inflation, the rise in prices without strongly fluctuating prices such as those for energy and food, remained at 5.2 percent.

This is the highest level since the introduction of the euro.

Even if energy and food prices continue to cause inflation to fall somewhat, the last few percentage points in particular could become more difficult to combat.

The first signs of political resistance to higher interest rates came from Italy.

However, ECB Executive Board member Isabel Schnabel said: "We have to endure that - that's exactly why central banks are independent."

ECB dares bigger step than Fed

The interest rate hike by the ECB affects all three key interest rates: the main refinancing rate is now 3 percent.

This is the interest rate at which banks can borrow money for a week against collateral from the ECB.

The so-called deposit rate - the interest that banks get for deposits at the ECB and which, at least from their point of view, is the most important key rate at the moment - rises to 2.5 percent.

This was negative until last year.

In addition, the top refinancing rate, at which banks can secure overnight liquidity from the central bank, climbs to 3.25 percent.

This time, the ECB is hitting harder than the American Federal Reserve (Fed), which announced on Wednesday that it was only raising interest rates by 0.25 percentage points.

The American central bank had so far reacted faster and more strongly to the inflation, which, however, had already risen in the United States.

Apparently she's fading earlier now too.

Even verbally, the Fed and the ECB now differ significantly.

"The ECB is still in the middle of an inflationary war, while the Fed can slowly prepare a truce," said Karsten Junius, economist at Bank J. Safra Sarasin.

How often the ECB will raise interest rates is a matter of debate among economists.

Jari Stehn, the chief European economist at the investment bank Goldman Sachs, predicts a further interest rate hike by the ECB by 0.5 percentage points in March - and a last interest rate hike in May by 0.25 percentage points.

But there are also other predictions.

On Thursday, the ECB itself announced another rate hike of 0.5 percentage points in March.

On the other hand, there was already speculation on the financial markets that the central bank could lower interest rates again in the second half of the year.

However, ECB President Lagarde rejected this expectation at the World Economic Forum in Davos.

Interest rates are also likely to rise further for consumers

For consumers, the turnaround in interest rates last year brought significantly higher interest rates on loans and slightly higher interest rates on savings.

The credit broker Interhyp is now expecting construction interest rates to continue to fluctuate considerably and interest rates between 3 and 4 percent for construction loans with a fixed interest rate of ten years.

The first banks are now offering 2 percent interest per year for call money.

Horst Biallo from the consumer platform of the same name expects the ECB interest rate hikes in February and March to give overnight interest rates another “boost”: “We expect to see a peak of three before the decimal point for overnight interest rates by spring.”

While conventional banks are still somewhat reluctant to pass on the rising ECB interest rates to savers, new competitors see this as an opportunity.

The so-called neo-brokers, who actually recommend ETFs and savings plans to their customers for investing, are currently advertising relatively high overnight interest rates on their clearing accounts for the depot.

C24, the comparatively new bank of the Internet comparison platform Check24, wants to win customers with 2 percent interest on current account balances for a limited time and for amounts up to 50,000 euros.