“European Central Bank raises interest rates to highest level since 2000…”

The European Central Bank (ECB) hiked interest rates for the ninth consecutive time on Thursday, bringing rates to their highest level in 23 years.

ECB President Christine Lagarde said that the bank’s governing council still had “an open mind as to what the decisions will be in September and in subsequent meetings”.

“This determination based on data might vary from one month to the other so we might hike and we might hold and what is decided in September is not definitive,” she said at a press conference.

Central banks around the world have been raising borrowing costs to combat inflation unleashed by higher energy prices after Russia invaded Ukraine and supply chain backups as the global economy recovered from the COVID-19 pandemic.

Now, the question is whether the rapid rate hikes are reaching their end.

The ECB move followed a decision by the US Federal Reserve on Wednesday to raise its key rate for the 11th time in 17 months. Fed Chair Jerome Powell was noncommittal about whether more rate increases might be coming, though inflation is lower in the US – at three per cent – than it is in Europe.

Inflation in the eurozone has fallen from its peak of 10.6 per cent in October to 5.5 per cent in June, still well above the bank’s target of two per cent considered best for the economy.

Households and businesses are facing a double hit from price spikes and higher rates, which make it more expensive for people to get loans to buy homes and cars or for companies to get new equipment or build facilities.

Rates are working their way through the economy, weighing on home prices and construction activity, and are designed to work so people spend less and prices come down. But they can also weigh on economic growth, and the eurozone already has seen back-to-back quarters of contraction.

“I think the good news for European compatriots is that inflation is declining,” said Lagarde.

“You know we had a reading of 10.6% in October, we are now at 5.5%. But is that enough, is that good as a result? Not quite. We have a target which is medium term 2%, sustainable, and we want to get there.”

With Thursday’s quarter-point increase, the ECB has raised its benchmark deposit rate from minus 0.5 per cent to 3.75 per cent in one year, the fastest credit tightening since the euro currency was launched in 1999.

The last time the bank raised the interest rate to 3.75 per cent was in October 2000 before they brought it down to 3.50 per cent in May 2001 before the currency was even in circulation.

The rate hikes are already working: House prices have started to decline after a yearslong rally, while business loans are at their lowest level since statistics started in 2003. The outlook for construction companies in Germany also hit its lowest level since 2010.

Malta:

Malta International Airport secures its first-ever seat on Airports Council International’s regional board

Malta International Airport’s Chief Executive Officer, Alan Borg, has been elected to Airports Council International (ACI) Europe’s regional board, becoming the first Malta International Airport CEO to secure a seat at this table.

Together with the chief executive officers of Aeroporti di Milano Linate e Malpensa and Aeroporti di Roma, Alan Borg will be representing the airports that fall within the European southern sub-region, which covers 19 markets including Cyprus, Greece, Italy, and Spain. The board is mainly composed of representatives from five European sub-regions, of which the southern sub-region is responsible for the largest share of traffic.

“This seat will give us the opportunity to make ourselves heard in relation to challenges such as seasonality, sustainable growth, and the impact of the requirements of the Fit for 55 package on destinations that, like Malta, are somewhat detached from the mainland. The opportunity to bring pressure to bear on decision-making bodies through the seat we have secured is not only a win for Malta International Airport but also for the wider local aviation industry,” said Chief Executive Officer Alan Borg, adding that it is both a privilege and a huge responsibility to serve on this board.

“It is an honour and a pleasure to welcome Alan to the Board of ACI Europe.  The role of insular airports such as Malta has never been more vital to our membership and our industry as a whole. They are flying the flag for connectivity and cohesion as well as driving our recovery in passenger traffic as a new sustainable aviation paradigm emerges. Alan brings a rich background in airport management and a wealth of experience – our board will be all the stronger for his presence,” said Olivier Jankovec, Director General of ACI Europe.

ACI Europe was established to lend airports a stronger and more unified voice in all matters related to aviation, today representing 500 member airports in 55 countries. The organisation has most recently been vocal about the impact of burdensome restrictions on air travel, the industry’s post-COVID recovery and aviation-specific sustainability topics.

In 2019, ACI Europe made waves with its landmark NetZero 2050 Resolution, which has been signed by more than 100 airport groups and airports, including Malta International Airport, making it one of the most significant collective commitments by a single industry towards the decarbonisation of its operation.

 

Malta Company Announcements:

Plaza Centres p.l.c

The Board of directors is scheduled to meet on Wednesday, 2^nd August 2023 to consider and approve the interim financial results covering the six-month period ended 30^th June 2023.

BMIT Technologies p.l.c

The Board of directors is scheduled to meet on Friday, 4^th August 2023 to consider and approve the interim financial results covering the six-month period ended 30^th June 2023.

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