Central bank interest rates in the European Union 2022-2024, by country
European Union central banks have navigated a complex economic landscape, with interest rates rising across all member states between January 2022 and December 2024. However, a shift occurred in late 2023 as most countries began lowering their rates. This trend reflects the delicate balance central banks must strike between controlling inflation and supporting economic growth.
Global context and policy shifts
The interest rate changes in the EU mirror similar movements in other major economies. The United States, United Kingdom, and European Union central banks followed remarkably similar patterns from 2003 to 2024, responding to shared global economic conditions. After maintaining near-zero rates following the 2008 financial crisis and the COVID-19 pandemic, these institutions sharply raised rates in 2022 to combat surging inflation. By mid-2024, the European Central Bank and Bank of England initiated rate cuts, with the Federal Reserve following suit.
Varied approaches within the EU
Despite the overall trend, individual EU countries have adopted diverse strategies. Hungary, for instance, set the highest rate in the EU at 13 percent in September 2023, gradually reducing it to 6.5 percent by September 2024. In contrast, Sweden implemented the most aggressive cuts, lowering its rate to 2.75 percent by November 2024, the lowest among EU members. These divergent approaches highlight the unique economic challenges faced by each country and the flexibility required in monetary policy to address specific national circumstances.