European Central Bank raises interest rates again, warns about economic slowdown

• "Inflation continues to decline but is still expected to remain too high for too long," the ECB said in a statement.

Where it stands: Inflation in the euro area rose at a 5.3% annual rate in August, unchanged from the prior month. The core measure, which excludes volatile items like food and energy, eased to 5.3%.

• New projections released alongside the rate decision on Thursday show that European central bankers anticipate inflation will be firmer than previously thought.

By the numbers: The ECB projects that average inflation will be 5.6% this year and 3.2% in 2024 — both higher than estimated in June, largely reflecting "a higher path for energy prices." Excluding energy and food, inflation forecasts were revised lower.

• The ECB also lowered expectations for economic growth, citing effects from higher interest rates "and the weakening international trade environment."
• The euro zone is now expected to grow by just 0.7% this year and 1% in 2024.

The bottom line: Thursday's move brings key interest rates across the euro bloc to the highest levels on record. Economic activity has in many of its economies, including its largest, Germany, has already slowed notably.

• Rates have "reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target," the ECB said in a statement — a hint that the central bank may not opt to raise rates again.

Yes, but: Officials did not totally rule out another increase down the line, noting that the ECB will continue to evaluate economic data to determine "the appropriate level and duration" of restrictive policy.