The European Central Bank (ECB) was expected to increase its key interest rate by a further 75 basis points on Thursday as the eurozone struggles with runaway inflation, DW reports.
The hike would be the second such move by the ECB in recent months. It aims to dampen spending by increasing the cost of borrowing in hopes of bringing down rising costs of essential goods such as food and energy.
Inflation in the eurozone was at around 10% in September, five times higher than the 2% maximum target.
Recession fears
Government spending during the coronavirus pandemic and the subsequent Russian invasion of Ukraine are seen as the main culprits for rising prices.
Europe's withdrawal from Russian energy has left several economies in already precarious situations — Germany is expected to watch its economy shrink by 0.4% next year.
Some European leaders have criticized the ECB's decision to increase interest rates, saying that it will pile problems on countries with high debt and that it will torpedo demand — further stoking recession fears.
ECB President Christine Lagarde has said that inflation is "far too high" and called for more steps to be taken. She also warned eurozone members against high government spending that would counter the ECB's attempts to bring inflation back under control.