The European Central Bank on Thursday raised interest rates by a higher-than-expected height of half a percentage point for the first time in 11 years, following the US Federal Reserve (0.75%) and other major central banks to fight high inflation..

This step leads to an increase in the cost of loans and questions arise: will this lead to a recession in the largest economies and is the price of fighting inflation too high

ECB rate hike of 0.5% for 19 euro-using countries is expected to be followed by another hike in September, perhaps another half a point. It is worth recalling that bank president Christine Lagarde announced a quarter-point increase just last month, when inflation reached a record 8.6%.

She said at the time that the rate hike was unanimous as " At the same time, Lagarde reassured that economic forecasts do not indicate a recession this or next year, but she acknowledged that uncertainty looms ahead..

" Russia's unjustified aggression against Ukraine continues to slow down growth," Higher inflation, supply constraints and uncertainty "

Rate hikes seen as standard cure for excessive inflation. However, by making it harder to get credit, raising rates could slow economic growth, which is a major concern for both the ECB and the US Federal Reserve..

The Fed raised rates by three-quarters of a point in June and may do so again at its next meeting. The Bank of England started marching up in December, and even the Swiss central bank surprised with its first rate hike in almost 15 years last month (which, however, remained negative).

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The goal of all central banks is to bring inflation down to an acceptable level.. For the ECB, this is 2% per year - without the economy falling into recession. It's hard to get it right as central banks roll back a decade of very low rates and low inflation..

" Therefore, we must reduce inflation to 2% in the medium term. It's imperative," "

Recall that in early June, the National Bank of Ukraine raised the key rate from 10 to 25%. And literally this morning, he collapsed the official hryvnia exchange rate by 25% - to UAH 36.56 / USD. At the same time, the exchange rate in exchange offices rose to 40 hryvnia for one dollar in a few hours..

Such “multi-vector” actions of the NBU, on the one hand, stopped the economy of the country suffering from Russian aggression, and, on the other hand, spurred inflation and robbed its citizens, since, following the expensive dollar, prices for literally everything will rise proportionally.. But pensions and salaries are unlikely to “take off”. That is, in addition to the rocket strikes of the Russians, we will get inflation up to 75%. And it's almost " Can everything be attributed to the war.

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