Jim Power: Households should brace for more ECB interest rate increases

ECB chief economist Philip Lane said last week there was still a strong case for the ECB to deliver an increase of half a point on March 16 — this rate increase has now become a nailed-on certainty.

Inflation is proving very worrying for the European Central Bank, even though headline rates have been decelerating. Picture: Alex Kraus

Persistent inflation and rising interest rates have dominated global economic and financial discourse over the past year, and unfortunately these pressures have continued into 2023.

Over the past week, we got further evidence of just how stubborn inflation is proving, while central bankers are determined to respond by continuing to push up interest rates. Inflation in France jumped to 7.2% in February — the highest rate in that country since the euro was introduced in 1999 — and Spanish inflation jumped to 6.1%.