Europe likely to see another jumbo interest rate increase

FRANKFURT, Germany (AP) — The European Central Bank is set to follow the playbook of the U.S. Federal Reserve in making its second big interest rate increase in a row on Thursday, underlining its determination to stamp out the record inflation that threatens to sink the 19-country euro area into recession.  

An increase of three-quarters of a percentage point is the likely outcome of the meeting based on public comments from bank officials. The 25-member governing council led by bank President Christine Lagarde made the same record hike at its last meeting on Sept. 8, echoing drastic moves by the Fed, which hiked by three-quarters of a point for the third straight time last month.  

The ECB is aiming to reduce inflation that hit 9.9% in September, the highest since statistics started being compiled in 1997 for the 19 countries that use the euro currency. That is far above its goal of 2% considered best for the economy.  

A big increase would underscore the bank's resolve to get consumer prices under control but comes amid uncertainty about the future of the eurozone economy. Many economists are penciling in a recession for the end of this year and the first part of next year. While higher rates can fight inflation, they can also weigh on already slowing economic growth.