Economy

ECB unlikely to signal another big interest rate hike due to SVB, economists say

It had previously been predicted that officials would give guidance on rate increases as they look to tackle inflation

It had been expected that the ECB’s central deposit rate would be increased to 3.75 per cent in July. Picture: Getty

The collapse of Silicon Valley Bank lowers the chances of the European Central Bank committing at this week’s meeting to another big increase in borrowing costs, according to Bloomberg Economics.

The US lender’s fall is a reminder that “when rates rise quickly things get broken,” said Jamie Rush, Bloomberg’s chief European economist, before Thursday’s planned half-point hike in the deposit rate.

“Coming so close to this month’s meeting, uncertainty surrounding SVB will reduce the appeal ...