ECB says it intends to raise key interest rates in July

Policymakers at the European Central Bank say they intend to raise interest rates next month as inflation remains higher than expected, largely owing to Russia's invasion of Ukraine.

Members of the ECB's Governing Council met in Amsterdam on Thursday.

Policymakers decided to end their quantitative easing program on July 1 and say they intend to raise key rates by 0.25 percentage points at their July meeting. It would be the first rate increase in 11 years.

ECB President Christine Lagarde spoke at a news conference after the session. She said "inflation again rose significantly" in May, mainly because energy and food prices have been surging mostly due to the Russian invasion.

Lagarde said "inflation pressures have broadened and intensified," and "projections indicate that inflation will remain undesirably elevated for some time."

She said policymakers "expect to raise the key ECB interest rates again in September," and "anticipate that a gradual but sustained path of further increases in interest rates will be appropriate" beyond that.

The bank's key rates currently stand at zero percent and the rate on deposits from financial institutions is at minus 0.5 percent.