The European Central Bank delivered a smaller interest rate hike as higher borrowing costs begin to take their toll, but said it had "more ground to cover" in fighting inflation.The ECB's lending survey this week showed that banks are getting stricter about giving loans and that consumers and companies are asking for less credit and fewer mortgages. / Photo: Reuters Archive
The decision comes a day after the Fed approved a quarter-point increase and hinted that it may have reached the end of its hiking cycle. The bank said inflation “has declined over recent months, but underlying price pressures remain strong.” Making it more expensive to borrow can cool off spending, easing pressure on prices but potentially weighing on economic growth.
Energy costs have since fallen, but the surge is still feeding through to higher prices for goods, services and food.
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