European stocks soar higher after record ECB interest rate hike

European stocks soar higher after record ECB interest rate hike

European markets opened higher on Friday after investors reacted to a record rate hike by the European Central Bank and further comments from Federal Reserve Chairman Jerome Powell.

The pan-European Stoxx 600 rose 0.7% at 8:30 a.m. London time, with nearly all sectors trading in the green. Funds rose by 3.3%, while banks were up by 1.6%. Food and drink were traded flat.

On Thursday, the European Central Bank announced an interest rate hike of 75 basis points, bringing the benchmark for deposits to 0.75%. The bank also revised its inflation expectations – to an average of 8.1% in 2022 – and said it expects to raise interest rates further because “inflation remains much too high and is likely to remain above target for an extended period of time”.

Meanwhile, the Fed’s Powell said on Thursday that the US central bank will raise interest rates to tackle inflation “until the job is done.”

“History strongly warns against premature policy easing,” said Powell of the Cato Institute, a libertarian think tank based in Washington, DC. the job is done.”

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