FRANKFURT: The Euro­pean Central Bank anno­unced the largest rate hike in its history on Thursday and said there were more to come as it scrambles to pull inflation down from record heights.

Policymakers lifted the ECB’s key rates by 75 basis points, a leap matched only by a technical move made in 1999 shortly after the central bank’s founding.

Eurozone inflation hit a record 9.1 per cent in August, as steep increases in the price of energy in the wake of the Russian invasion of Ukraine heaped pressure on households and businesses.

Consumer prices were likely to continue to rise quickly “for an extended period”, the ECB said in a statement, with its latest forecasts expecting inflation to average 8.1pc in 2022.

The “major step” quickened the ECB’s move away from a “highly accommodative level of policy rates” to one that would bring inflation back to its two-percent target, it said.

The Frankfurt-based institution was on a “journey” to raise interest rates and tame inflation, ECB President Christine Lagarde said at a press conference.

The ECB already exceeded expectations at its July meeting with a 50-basis-point increase in interest rates, its first hike in more than a decade.

Published in Dawn, September 9th, 2022