ECB raises interest rates again, cuts bank subsidies

FRANKFURT – The European Central Bank raised interest rates again on Thursday and announced it was changing the terms of its ultra-cheap loans to commercial banks in a bid to shrink its bloated balance sheet and fight off a historic surge in inflation.

Worried that rapid price growth is becoming entrenched, the ECB is raising borrowing costs at the fastest pace on record, with further hikes almost certain as unwinding a decade’s worth of stimulus will take it well into next year and beyond.

The central bank for the 19 countries that use the euro raised its deposit rate by a further 75 basis points to 1.5 percent – the highest rate since 2009. Until as recently as July, ECB rates ha…

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