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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 impact of previous interest rate hikes continued 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 the principal repayments would be reinvested by the end of 2024 at the latest.
<h2 class="p1" style="text-align: justify" id="ecb-s-unexpected-decision">ECB’s Unexpected Decision</h2>
The European Central Bank (ECB) decided to refrain from raising interest rates for the first time in 15 months on October 26th, at a time when data indicating the continuation of economic contraction in the European Union were increasing. The ECB continued to keep the benchmark interest rate in the 20 countries that use the euro as their currency at the highest level since the currency was introduced in 1999, which is 4%. The following statements were included in the central bank’s announcements:
<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 has declined significantly in September, and most of the measures underlying inflation have continued to ease.”
</blockquote>
The decision to pause the interest rate hike, following ten consecutive rate hikes, came after data showing a further decline in inflation and a sharp drop in economic activity in the region. An October survey among companies operating in the manufacturing and service sectors in the Eurozone indicated a weakening demand, leading to a significant 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 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 for 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 Euro area. We cannot be caught unprepared to see a mild recession in the Eurozone in the second half of this year.”
</blockquote>
The lender survey published by the ECB on October 24th revealed that demand for business loans and mortgage loans continued to decline sharply 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/unexpected-decision-from-ecb-interest-rates-remain-unchanged/" data-wpel-link="internal" rel="noopener noreferrer nofollow">https://en.coin-turk.com/unexpected-decision-from-ecb-interest-rates-remain-unchanged/</a>

Unexpected Decision from ECB: Interest Rates Remain Unchanged

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