Eurozone interest rates set to rise for first time in 11 years

Image source, Reuters

TheECB will raise interest rates for the first time in more than a decade next month as it tries to control soaring inflation in the eurozone

In July, the euro zone's central bank will raise its key interest rates by a quarter of a percentage point.

The bank plans to stop buying bonds on July 1st.

It's a challenge for all of us. The Governing Council of the European Central Bank will make sure that inflation returns to its 2% target over the next few years.

The main policy interest rate could return to zero or above by the end of September according to the bank. The last interest rate hike was in 2011.

Energy and food prices went up in May.

Prices for many goods and services have increased strongly.

The bank has raised its estimate for inflation this year to 6.8%, before decreasing it to 3.5% in 2023 and 2% in 2024.

The eurozone's growth forecast has been cut from 3.7% to 2.8% for the next two years.