The European Central Bank (ECB) on Thursday announced another massive interest rate hike to combat surging inflation, despite growing concerns that the eurozone is moving towards a painful recession.

The ECB’s 25-member governing council repeated last month’s unusual move and opted for another hike of 75 basis points (bps), leaving its three key rates sitting in a range of between 1.5% to 2.25%. The central bank indicated an intention to start mopping up cash from the banking system to combat record-high inflation.

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The ECB move matches the US Federal Reserve’s series of rapid hikes to tackle soaring consumer prices. Until as recently as July, ECB interest rates had been in negative territory for eight years.

“The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target,” the ECB said in a statement.

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Inflation remains too far high and will stay above the target for an extended period, the central bank said in a statement. The ECB has now hiked rates by a full 2 percentage points in just three months, a distance that took 18 months to cover during its last extended hiking phase in 2005-07 and 17 months in 1999-2000.

The widely expected rate hike comes as the Frankfurt institution faces pressure to curb record-high inflation, mainly driven by skyrocketing energy costs in the wake of Russia’s war in Ukraine.

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Eurozone inflation stood at 9.9% in September 2022, nearly five times the ECB’s 2% target. The ECB projects inflation falling to 2.3% by the end of 2024.

In its statement, the central bank warned that inflation “remains far too high” in the 19-nation currency club, blaming “soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand”.

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At the press conference, ECB President Christine Lagarde said that while the Ukraine war and other global uncertainties meant the euro area economy faced several risks to the downside, inflation risks were skewed upwards.

“Incoming wage data and recent wage agreements indicate that the growth of wages may be picking up,” she said of the potential emergence of future wage-rate hikes, stressing the bank was watching expectations about long-term inflation.

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The ECB provided no hints for now about plans to start winding down its bond holdings, after hovering up trillions of euros of debt issued by eurozone governments since 2015.

Central banks around the world are rapidly increasing interest rates which makes borrowing expensive for businesses and consumers. Their goal is to halt soaring inflation fueled by high energy prices linked to Russia’s invasion of Ukraine, post-pandemic supply bottlenecks, and reviving demand for goods and services after Covid-19 restrictions eased. The US Federal Reserve raised rates by three-quarters of a point for the third straight time last month.