The European Central Bank hikes interest rates after over a decade. Is this the right move for people? 

The European Central Bank hikes interest rates after over a decade. Is this the right move for people? 

On July 21st, the European Central Bank (ECB) announced that it is raising interest rates by 0.5 per cent, opting for an even higher hike than what was announced in June. Over the past few months, Positive Money Europe has repeatedly warned that higher interest rates are simply not the right solution to current price increases, as they will negatively affect people and jeopardise the well-being of our economies and the future of the post-pandemic green recovery. Why do we think so? In this blog, we answer a few questions about the impact that rising interest rates will have on people’s daily lives.

Does monetary policy work against workers?

Does monetary policy work against workers?

A new study finds that ECB’s monetary policy affects the wage share of companies and thereby the distribution of income between workers and shareholders. Given that these effects differ by firm characteristics, monetary policy has uneven effects across the euro area. To tackle this, more targeted monetary policy tools should be developed. 

ECB ready to be tough on climate but misses a trick on inflation

ECB ready to be tough on climate but misses a trick on inflation

The outcomes of the ECB’s strategic review show how much progress was made on civil society demands such as climate action and the inclusion of housing prices in inflation data. However, the ECB failed to depart from the status quo in terms of its core monetary policy tasks. Nonetheless, the ECB’s commitment to carry out periodic reviews, as soon as in 2025) are good foundations for working towards a more effective and fair monetary policy.  

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