Rate Rises And Recession Risk In Europe

By Carsten Brzeski and Rebecca Byrne of ING Economics

Economic and Financial Analysis • Jul 22, 2022 at 2:00 PM EDT

The European Central Bank raised interest rates by 50bp. But political instability in Italy, an ongoing war in Ukraine, and a looming recession suggest there is little room to go much further.

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Running Length: 00:15:28

After raising interest rates on Thursday, the ECB left the door open for further hikes in a bid to combat the highest inflation on record. But the Bank also announced a new bond-buying program to soften the blow of higher rates amid fears of a new debt crisis. In this podcast, ING's Carsten Brzeski tells Senior Editor Rebecca Byrne that this strategy is akin to stepping on the brakes and the accelerator at the same time. So can it work? And what does it all mean for Europe's economy?

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