The European Central Bank raised interest rates by 25 basis points as expected, or signaled a pause in September

　　The European Central Bank has raised interest rates again as expected and signalled that the tightening cycle is nearing an end, even though inflation remains well above the central bank's target. But it also emphasized that future actions will be based on a data-driven approach.

　　The central bank raised its policy rate by 25 basis points to 3.75 per cent, in line with economists' expectations and the ninth consecutive increase.

　　In its monetary policy decision, the central bank said: "Future decisions will ensure that the ECB's key interest rate remains at a sufficiently constrained level for as long as necessary." The Board will continue to adopt a data-dependent approach to determine the appropriate level and duration."

　　Later, ECB President Christine Lagarde said at a press conference: "We are open to what decisions will be taken in September and subsequent meetings." So we can raise rates or we can keep them there. If we choose to pause, it won't necessarily be for a long time."

　　"The outlook for inflation remains too high for too long," she stressed.

　　On economic conditions and prospects, she said: "The recent deterioration in the economic outlook for the euro area is mainly due to weak domestic demand. Over time, falling inflation, rising incomes, and improving supply conditions should support the recovery."

　　After the meeting, bonds surged and the euro plunged 0.75% to 1.10 against the dollar. Money markets are pricing in a 40 per cent chance of a September rate rise, down from 50 per cent before the meeting.