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The European Central Bank (ECB) announced on October 26th that it would keep interest rates unchanged. It was stated that the previous interest rate hikes continue to strongly reflect on financing conditions. Officials also made statements regarding the Pandemic Emergency Purchase Program (PEEP), and according to this, it was announced that principal payments would be reinvested by the end of 2024 at the latest.
<h2 id="ecb-s-unexpected-decision">ECB’s Unexpected Decision</h2>
The European Central Bank (ECB) refrained from raising interest rates for the first time in 15 months on October 26th, at a time when data indicating the ongoing economic downturn in the European Union was increasing. The ECB continued to keep the benchmark interest rate in the 20 countries that use the fiat currency Euro at the highest level since its introduction to the <a href="https://newslinker.co/category/finance/" data-wpel-link="exclude" rel="noopener noreferrer nofollow">market</a> in 1999, which is 4%. The following statements were included in the central bank’s announcement:
<blockquote>
 “Inflation is still expected to remain significantly high for a very long time, and domestic price pressures continue to remain strong. At the same time, inflation has decreased significantly in September, and most of the measures underlying inflation continue to ease.”
</blockquote>
The decision to pause the interest rate hike, which came after 10 consecutive interest rate increases, came after data indicating a continued decline in inflation and a further slowdown in economic activities in the region. An survey published among companies operating in the manufacturing and service sectors in the Eurozone on October 24th indicated a sharp decline in production, along with a weakening demand.
<img decoding="async" class="aligncenter wp-image-89573 size-full" src="https://coin-turk.com/wp-content/uploads/2020/05/abnin-750-milyar-euroluk-tesvik-paketi-btcyi-nasil-etkiler.jpg" alt="" width="1200" height="675">
<h2 id="pmi-data-indicates-recession">PMI Data Indicates Recession</h2>
According to the Purchasing Managers’ Index (PMI), companies resorted to employment cuts, indicating the first decrease in personnel since the Covid-19 quarantine period at the beginning of 2021. The index, which was 47.2 in September, declined to 46.5 in October, reaching its lowest level in 35 months. A value below 50 for this index indicates a contraction in market conditions.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, who collaborated with S&amp;P Global to analyze PMI data, commented on these data as follows:
<blockquote>
 “Things are going from bad to worse in the Euro area. We cannot be caught unprepared to see a mild recession in the Eurozone in the second half of this year.”
</blockquote>
The credit lending survey published by the ECB on October 24th reveals that the demand for business loans and mortgage loans continued to decline sharply in the third quarter of the year, more than what banks had expected. The report also stated that banks continue to tighten credit standards in all loan categories. Continue Reading: <a href="https://en.coin-turk.com/unexpected-decision-from-ecb-interest-rates-kept-unchanged/" data-wpel-link="internal" rel="noopener noreferrer nofollow">https://en.coin-turk.com/unexpected-decision-from-ecb-interest-rates-kept-unchanged/</a>

Unexpected Decision from ECB: Interest Rates Kept Unchanged

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