• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Español
  • English
  • Bloglovin
  • Email
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
CDE Almería – Centro de Documentación Europea – Universidad de Almería

CDE Almería - Centro de Documentación Europea - Universidad de Almería

Centro de Documentación Europea de la Universidad de Almería

  • HOME
  • WHAT´S ON
    • EU BULLETINS
    • EU NEWS
    • Activities
    • EU Calls and Awards
    • Radio Program «Europe with You»
  • DOCUMENTATION
    • Bibliographic Collection
      • Almería EDC Digital Collection
      • UNIVERSITY OF ALMERIA LIBRARY
    • Documentation by topic
    • EU Media Collection
      • Web Space
      • MEDIATHEQUE REPOSITORY
  • Europe on the net
    • Institutions
    • EU Representation in Spain
    • European information network of Andalusia
    • EU official journal
  • ABOUT US
    • Presentation
    • People
    • Contact

ECB raises interest rates for first time in eleven years

Inicio » EU News » Market » Economy and Finance » ECB raises interest rates for first time in eleven years

22 de July de 2022

The ECB Governing Council has raised interest rates for the first time in eleven years, and is likely to raise them again in the coming months.

subida tipos de interes BCE

Why have interest rates increased?

The ECB is the central bank of the euro and has a mandate to keep prices stable. When prices in our economy are rising too fast – i.e. when inflation is too high – raising interest rates helps us to bring inflation back to our medium-term target of 2%.

Inflation is putting a strain on people. Many are worried that it is here to stay. We keep an eye on these so-called inflation expectations. That’s why ECB has raised interest rates: to send the message that ECB will not allow inflation to stay above 2%. That will help keep inflation expectations in check.

 

A tale of two decades. The ECB’s monetary policy at 20

 

 

What are interest rates?

Interest rates are the cost of borrowing money (it is sometimes said that interest rates are “the price of money”). If you want to take out a loan from a bank, you first have to agree on a certain rate, which is usually an annual rate. Let’s say you borrow €10,000 at an annual rate of 3%. This means you will have to pay your bank €300 per year in addition to paying back the loan. So, the interest rate is essentially what the bank charges you for lending you money.

It also works the other way around. Interest is the money the bank pays you on your savings, i.e. when the bank “borrows” money from you. For example, if you put €1,000 into your savings account at an annual rate of 2%, at the end of the year you will receive €20 in interest.

What causes interest rates to move?

The interest rates that banks offer people and businesses usually move in tandem with the rates set by the ECB, but they are also influenced by other factors. In a free market economy like the euro area, rates are also determined by the demand for and supply of credit. In other words, how much businesses and people want to spend and invest, and how much credit is available.

Eurozone finance ministers agree on fiscal policy guidelines

 

 

What is money?

It’s similar to other products or services. For example, if many people want to buy bread, but there is not enough bread available, the price goes up.

The same applies to interest rates: when businesses and people want to spend and invest, but they can’t easily get enough credit, interest rates tend to go up, because there is less credit available. In other words, borrowing becomes more expensive. If it is the other way around and people save a lot of their money in the bank, the economy is flush with money – often called liquidity – so rates tend to be low.

More information: European Central Bank – Press release

Publicaciones relacionadas:

The European Commission welcomes the cooperation agreement concluded between the European Central Bank, the Eurosystem and Sveriges Riksbank European Central Bank: Monetary policy decisions New green policies for companies and banks ECB to stop buying debt in March New ECB monetary policy decisions

“This is a space for debate. All comments, for or against publication, that are respectful and do not contain expressions that are discriminatory, defamatory or contrary to current legislation will be published”.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Publicaciones relacionadas

The European Commission welcomes the cooperation agreement concluded between the European Central Bank, the Eurosystem and Sveriges Riksbank European Central Bank: Monetary policy decisions New green policies for companies and banks ECB to stop buying debt in March New ECB monetary policy decisions

Footer

Logotipo en negativo del Centro de Documentación Europea de Almería
  • CDE Almería
  • Edificio Parque Científico-Tecnológico (Pita)
  • Planta: 1ª, Despacho: 2904120.
  • Ctra. Sacramento s/n. Almería (Spain)
  • Teléfono: (+34) 950 015266

HOME
NEWS
DOCUMENTATION
EUROPE ON THE NET
ABOUT US

  • LEGAL NOTICE
  • PRIVACY POLICY
  • COOKIE POLICY
  • ACCESSIBILITY
  • SITEMAP

Copyright © 2022 CDE Almería · Creative Commons LicenseThis work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

<p>El Centro de Documentación Europea de la Universidad de Almería utiliza cookies propias y de terceros para facilitar al usuario la navegación en su página Web y el acceso a los distintos contenidos alojados en la misma. Asimismo, se utilizan cookies analíticas de terceros para medir la interacción de los usuarios con el sitio Web. Pinche el siguiente enlace si desea información sobre el uso de cookies y como deshabilitarlas. ajustes</p>

Politica de privacidad

El Centro de Documentación Europea de la Universidad de Almería utiliza cookies propias y de terceros para facilitar al usuario la navegación en su página Web y el acceso a los distintos contenidos alojados en la misma. Asimismo, se utilizan cookies analíticas de terceros para medir la interacción de los usuarios con el sitio Web. Pinche el siguiente enlace si desea información sobre el uso de cookies y como deshabilitarlas. <a href="/politica-de-cookies" rel="noopener" target="_blank">Más información</a>

Cookies estrictamente necesarias

Las cookies estrictamente necesarias tiene que activarse siempre para que podamos guardar tus preferencias de ajustes de cookies.

Básicamente la web no funcionara bien si no las activas.

Estas cookies son:

  • Comprobación de inicio de sesión.
  • Cookies de seguridad.
  • Aceptación/rechazo previo de cookies.

Si desactivas esta cookie no podremos guardar tus preferencias. Esto significa que cada vez que visites esta web tendrás que activar o desactivar las cookies de nuevo.

Cookies de terceros

Esta web utiliza Google Analytics, Google Tag Manager y Yandex Metrika para recopilar información anónima tal como el número de visitantes del sitio, o las páginas más populares.

Dejar estas cookies activas nos permite mejorar nuestra web.

¡Por favor, activa primero las cookies estrictamente necesarias para que podamos guardar tus preferencias!

Política de cookies

Pinche el siguiente enlace si desea información sobre el uso de cookies y como deshabilitarlas. Más información