The European Central Bank raised interest rates by half a percentage point on Thursday, its fourth successive hike, and outlined plans to shrink its bloated balance sheet from March, hoping that higher borrowing costs will finally arrest runaway inflation.
The central bank for the 19-country euro zone raised its deposit rate to 2%, as expected, and kept further hikes firmly on the table, as fresh economic projections indicated it would still take years to get price growth back to 2%.
The ECB has raised interest rates by a combined 2.5% percentage points since July, its fastest pace of monetary tightening on record, to counter inflation driven above 10% this autumn by soaring food, energy and now services prices.
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