September was characterized by key interest rate hikes by several European central banks. The ECB increased deposit rates for the second time this year at the beginning of September as inflation rates had risen to over 8% – far from the ECB’s medium-term target of 2%.
Further European central banks followed ECB’s move with rate hikes between 50 and 75 basis points. Sweden’s Riksbank even raised rates by 100 basis points to catch up after a late start to the tightening campaign. However, in view of the sharp rise in the cost of living, the key rate of 1.75% is expected to be raised further to fight inflation.