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The European Central Bank (ECB) announced on October 26th that it would keep interest rates unchanged. According to the announcement, the impact of previous interest rate hikes on <a href="https://newslinker.co/category/finance/" data-wpel-link="exclude" rel="noopener noreferrer nofollow">financial</a> conditions continues to be strong. Officials also made statements regarding the Pandemic Emergency Purchase Program (PEEP), stating that principal payments will be reinvested until the end of 2024.
<h2 id="ecb-s-unexpected-decision">ECB’s Unexpected Decision</h2>
The European Central Bank (ECB) chose to avoid raising interest rates for the first time in 15 months on October 26th, amid increasing data indicating a continued economic slowdown in the European Union. The ECB kept the benchmark interest rate, which is denominated in the fiat currency Euro and used by 20 countries, at the highest level since the currency was introduced in 1999, at 4%. The following statements were made by the central bank:
<blockquote>
 “Inflation is expected to remain very high for a long time, and domestic price pressures continue to be strong. At the same time, inflation has declined significantly in September, and most of the underlying measures of inflation have continued to ease.”
</blockquote>
The decision to pause the interest rate hike, after 10 consecutive increases, came after data indicating a further decline in inflation and a sharp drop in economic activity in the region. An survey published among companies operating in the manufacturing and service sectors of the Eurozone on October 24th indicated a weakening demand and 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 have resorted to employment cuts, indicating the first decrease in personnel since the Covid-19 quarantine period in early 2021. The index, which was 47.2 in September, fell to 46.5 in October, reaching its lowest level in the past 35 months. A value below 50 in 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, made the following comment about these data:
<blockquote>
 “Things are going from bad to worse in the Eurozone. Seeing a mild recession in the Eurozone in the second half of this year should not catch us unprepared.”
</blockquote>
The lending survey published by the ECB on October 24th reveals that demand for business loans and mortgage loans continues to decline sharply in the third quarter of the year, surpassing the expectations of banks. The report also states that banks continue to tighten credit standards in all loan categories. Continue Reading: <a href="https://en.coin-turk.com/unexpected-decision-from-the-ecb-interest-rates-kept-unchanged/" data-wpel-link="internal" rel="noopener noreferrer nofollow">https://en.coin-turk.com/unexpected-decision-from-the-ecb-interest-rates-kept-unchanged/</a>

Unexpected Decision from the ECB: Interest Rates Kept Unchanged

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