ROME, June 15 (Xinhua) -- The European Central Bank (ECB) on Thursday announced a new interest rate increase of 25 basis points, and the reaction from markets was limited as the move has been widely expected.
The euro currency used in 20 European Union member states rallied against the U.S. dollar early in Thursday's session, but it ended the day only slightly stronger than the dollar.
Trading was brisk on the main stock exchanges in the eurozone, but the main indexes were not volatile: the blue chip indexes on the stock exchanges in Frankfurt, Paris, Milan and Madrid all ended the day slightly lower, while in Amsterdam the main index inched higher.
Inflation rates in the European Union have remained high after surging amid higher energy prices sparked by the conflict between Russia and Ukraine.
But they are declining: the rate for the eurozone in May was 6.1 percent. For the sixth time in seven months it declined compared to the previous month. That 6.1 percent rate compared to a year earlier is the lowest since February 2022.
In a note released on Thursday, the ECB said that despite the increase in interest rates, it expected inflation this year and through 2025 to be higher than it predicted at its previous meeting.
The bank now expects the headline inflation rate to reach 5.4 percent this year, 3.0 percent in 2024 and 2.2 percent in 2025. The ECB's inflation target is 2.0 percent.
The bank's Governing Council has raised rates at all its meetings since July 2022.
"The rate increase today reflects the Governing Council's updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission," the ECB said in a statement. ■