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The European Central Bank (ECB) announced on October 26th that it would keep interest rates unchanged. It was revealed that the effects of previous interest rate increases continued to strongly reflect on <a href="https://newslinker.co/category/finance/" data-wpel-link="exclude" rel="noopener noreferrer nofollow">financial</a> conditions. Officials also made statements regarding the Pandemic Emergency Purchase Programme (PEEP), announcing a plan to reinvest principal payments 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, amidst increasing evidence of ongoing economic contraction in the European Union. The ECB maintained the benchmark interest rate in the 20 countries that use the euro, at the highest level since the currency was introduced in 1999, at 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 have continued to ease.”
</blockquote>
The decision to pause the interest rate increase, following 10 consecutive rate hikes, came after a data indicating a further decline in inflation and a sharp drop in economic activity in the region. An October 24th survey among companies operating in the manufacturing and service sectors in the Eurozone indicated 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 have made job 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, dropped to 46.5 in October, marking the lowest level in the past 35 months. A value below 50 in this index indicates 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:
<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 demand for corporate loans and mortgage loans continued to sharply decline in the third quarter of the year, more than expected by 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/ecbs-unexpected-decision-interest-rates-remain-unchanged-2/" data-wpel-link="internal" rel="noopener noreferrer nofollow">https://en.coin-turk.com/ecbs-unexpected-decision-interest-rates-remain-unchanged-2/</a>

ECB’s Unexpected Decision: Interest Rates Remain Unchanged

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