{"text":[[{"start":8.95,"text":"The European Central Bank raised interest rates by a quarter point to 2.25 per cent on Thursday, becoming the first central bank in the G7 to increase borrowing costs in response to the Middle East energy shock."}],[{"start":22.75,"text":"The widely expected and unanimous decision marks the ECB’s first rise since September 2023 and brings rates back to a level last seen a year ago."}],[{"start":32.25,"text":"ECB president Christine Lagarde said it was “pretty obvious” that the central bank needed to raise rates as the conflict in the Middle East had created a “major energy shock” that was lasting longer than initially expected and was beginning to spill over into the wider economy. No alternative to a rate rise was discussed by the ECB’s governing council."}],[{"start":53.15,"text":"“We are beginning to see a broadening of inflation throughout the economy,” she said. "}],[{"start":57.9,"text":"Lagarde pushed back against suggestions by some economists that the increase was an “insurance” or “pre-emptive” move to avoid further surges in inflation."}],[{"start":66.8,"text":"“It is pretty obvious that we have to make a decision, that it is a sensible monetary policy decision. So I don’t need to characterise it as credibility, insurance, or anything else, for that matter,” she said, adding that it was a choice that should prove “robust” against all possible scenarios that might arise from the conflict in the Gulf. "}],[{"start":87.9,"text":"In line with the ECB’s approach of deciding interest rates on a meeting-by-meeting basis, Lagarde avoided giving a clear view on the central bank’s next probable steps. She did not answer a question at a press conference in Frankfurt on whether Thursday’s move would mark the start of a series of rate increases."}],[{"start":106.4,"text":"The ECB also raised its outlook for inflation for this year and next and cut its growth projections."}],[{"start":112.60000000000001,"text":"It expects headline inflation to average 3 per cent this year, before falling to 2.3 per cent in 2027. In a more adverse scenario, in which oil prices were to average more than $165 a barrel in the third quarter, the ECB said inflation would hit 4 per cent this year and rise to 5.3 per cent in 2027."}],[{"start":133.65,"text":"Lagarde said that while wage growth should ease in the second half of 2026, surveys showed that businesses “expected to increase their selling prices”. "}],[{"start":144.5,"text":"She also warned that there were signs that “underlying inflation” would be pushed up by higher energy prices driven by the conflict in the Middle East. "}],[{"start":152.65,"text":"In May, consumer prices in the 21-country Eurozone rose to 3.2 per cent, hovering above the ECB’s 2 per cent target for the third consecutive month."}],[{"start":null,"text":"
"}],[{"start":null,"text":"