ECB slows rate hikes and keeps options open

The European Central Bank eased the pace of its interest rate hikes on Thursday and kept its options open on future moves as it continues its fight against stubbornly high inflation in the euro zone.

The 25-basis-point increase to the ECB's three policy rates was the smallest since it started lifting them last summer and the central bank did not explicitly commit to further hikes.

"The Governing Council's future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target," the ECB said.


The ECB's seventh consecutive hike brings the rate it pays on bank deposits, the benchmark for borrowing costs in the 20-country euro zone, to 3.25% from 3.0%.

That was in line with analysts' expectations and with the U.S. Federal Reserve's rate decision on Wednesday.

The ECB is trying to bring inflation in the currency bloc back to its 2% target after it briefly touched double digits last year, fuelled by higher energy costs, margin expansion by companies and a tight labour market, among other factors.

ECB President Christine Lagarde will hold a press conference starting at 1245 GMT.

After Thursday's hike, the rate on the ECB's little-used weekly cash auctions will rise to 3.75% while overnight loans from the central bank will now cost 4.0%.