Losses of more than 1% in the euro markets in the wake of the ECB

European stock markets are moving with a negative sign on Friday in the aftermath announcements of the European Central Bank to tighten its policy in the coming months as the bank takes action to tackle inflation records.

The ECB announced yesterday its first steps in the tightening cycle it is launching, with its first interest rate hike in more than 10 years reaching 25 basis points, at the next monetary policy meeting in July, to be followed by another in September. possibly higher, ie by 50 basis points. The central bank has made it clear that it expects – on the basis of the current assessment of the inflation outlook – that a gradual but steady course of further interest rate hikes will be appropriate.

At the same time, the central bank released its latest financial forecasts, revising once again its upward estimates for the course of inflation. In particular, inflation is expected to reach 6.8% this year, well above the 5.1% forecast by the bank in March, while it is expected to fall to 3.5% in 2023 and 2.1% in 2024 ( from 2.1% and 1.9% in its previous estimates).

The Bundesbank today revised upwards its inflation forecast, setting inflation at 7.1% in 2022, well above the 3.6% it had forecast in December. For 2023, the German bank now places inflation at 4.5% from 2.2% previously.

On the board, the pan-European Stoxx 600 index lost 1.2% at 429.33 points. The index is going to end the week about 2.5% lower in the biggest drop since the beginning of May.

The German DAX fell 1.3% to 14,011.16 points, the French CAC 40 lost 1.1% to 6,290.31 points, while the British FTSE 100 fell 0.8% to 7,416.97 points.

In the periphery, the Italian FTSE MIB plunged 2.1%, while the Spanish IBEX 35 fell 1.43.