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The European Central Bank (ECB) refrained from raising interest rates for the first time in 15 months on October 26, amidst increasing data indicating ongoing economic downturn in the European Union. The ECB continued to keep the benchmark interest rate in the 20 countries that use the euro, at the highest level since the currency was launched in 1999, at 4%. The statements made by the central bank included the following:
<blockquote>
 “Inflation is still expected to remain very high for a long time and domestic price pressures continue to remain strong. At the same time, inflation decreased significantly in September and most of the measures underlying inflation continued to ease.”
</blockquote>
The decision to pause the interest rate hike, after 10 consecutive increases, came after a data indicating a continued decline in inflation and a sharp drop in economic activities in the region. An survey published among companies operating in the manufacturing and service sectors in the Euro Zone on October 24 indicated a weakening demand, leading to a sharp decline in production.
<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 made 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, fell to 46.5 in October, marking the lowest level in the past 35 months. A value below 50 on this index indicates a contraction in <a href="https://newslinker.co/category/finance/" data-wpel-link="exclude" rel="noopener noreferrer nofollow">market</a> 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 figures as follows:
<blockquote>
 “Things are going from bad to worse in the Eurozone. We should not be caught unprepared to see a mild recession in the Eurozone in the second half of this year.”
</blockquote>
The lending survey published by the ECB on October 24 also revealed that demand for business loans and mortgage loans continued to decline sharply in the third quarter of the year, exceeding the expectations of banks. The report also stated that banks continued to tighten credit standards in all loan categories. Continue Reading: <a href="https://en.coin-turk.com/unexpected-decision-from-the-european-central-bank/" data-wpel-link="internal" rel="noopener noreferrer nofollow">https://en.coin-turk.com/unexpected-decision-from-the-european-central-bank/</a>

Unexpected Decision from the European Central Bank

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