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ECB set to raise rates despite fall in eurozone inflation

Central bank expected to lift deposit rate by half a percentage point on Thursday as pressures persist

Eurozone rate-setters are set to raise borrowing costs by another half percentage point on Thursday, after figures published today showed underlying inflationary pressures in the region remain uncomfortably high.

The regional rate for core inflation – which excludes changes in food and energy prices, and is considered the best measure of the stickiness of price pressures — remained unchanged at an all-time high of 5.2 per cent in the year to January.

The figure, coupled with the resilience of eurozone output during the final quarter of 2022, all but confirms the European Central Bank will raise its deposit rate by another half a percentage point to 2.5 per cent at around lunchtime on Thursday.

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