Aurelia Butler

The warning comes at a time of widespread disruption at airports caused by staff shortages, including long queues and cancelled flights, as airlines struggle to keep up with a surge in demand after the COVID-19 pandemic.”We are concerned that consumers could experience significant harm unless airlines meet their obligations and minimise flight disruptions throughout the summer and beyond,” the Competition and Markets Authority (CMA) and the Civil Aviation Authority (CAA) said in a joint open letter to airlines.The CMA and CAA said some airlines may not be doing everything they can to avoid “harmful practices”, such as selling more tickets than they can reasonably expect to supply and failing to provide customers with clear information, including about the risk of cancellations.They also warned airlines they needed to support customers whose flights are cancelled, by offering alternative routes and providing effective communication, as well as paying refunds promptly.The two regulators said they were considering evidence and if they found consumers continued to face serious problems, they would consider further action including enforcement.They did not mention any airlines by name in their letter, but acknowledged some carriers had performed better than others in keeping customers informed beforehand about cancellations.The government has stepped in to try to help ease disruption at airports. Last month, Britain temporarily relaxed rules around airport slots to allow airlines to devise realistic flight schedules, while this month it launched a so-called aviation charter to help ensure passengers know their rights. More

The ECB raised its deposit rate by 50 basis points to zero, or twice as much as it had indicated after its previous meeting, in an effort to curb record-high inflation in the euro zone.It also raised the rate on its weekly and daily cash auctions by 50 basis points to 0.50% and 0.75% respectively, and signalled that further increases in its three rates were likely to come this year.”At the Governing Council’s upcoming meetings, further normalisation of interest rates will be appropriate,” the ECB said. “The frontloading today of the exit from negative interest rates allows the Governing Council to make a transition to a meeting-by-meeting approach to interest rate decisions.”In a bid to cushion the impact of the rise in borrowing costs, the ECB also unveiled a new tool, the Transmission Protection Instrument (TPI).This will let it buy bonds when it sees signs of financial fragmentation – an unwarranted divergence in borrowing costs among the euro zone’s 19 countries.”The scale of TPI purchases depends on the severity of the risks facing policy transmission. Purchases are not restricted ex ante,” the ECB said.The euro zone’s central bank had not raised rates for 11 years and the deposit rate has been in negative territory since 2014. Attention now turns to ECB President Christine Lagarde’s 1245 GMT news conference. More

Investing.com — The European Central Bank raised its key interest rates on Thursday for the first time in over 11 years, going beyond its own guidance as it tries to bring down inflation from record highs.  The ECB said it will raise the rate on its deposit facility, which provides the effective floor to euro money market rates, by 50 basis points to 0%, ending a nine-year experiment with negative official interest rates. The refinancing rate and the marginal lending rate will also rise by 50 basis points respectively to 0.5% and 0.75%.The bank had said at its last meeting that it intended to raise the deposit rate by 25 basis points in July, with a larger hike possible in September depending on the progress of inflation. The annual rate of inflation in the Eurozone rose by more than expected to 8.6% in June, according to data released earlier this week by Eurostat, prompting an abrupt recalculation by the central bank.As a result, the ECB signaled it would no longer provide forward guidance, which it has used for over 10 years, overwhelmingly to reassure them that there would be no immediate tightening of policy. “The frontloading today of the exit from negative interest rates allows the Governing Council to make a transition to a meeting-by-meeting approach to interest rate decisions,” it said, adding that future actions would be “data-dependent”. The euro rose on the news, hitting $1.0260, a gain of 0.8% on the day.The central bank said it had taken its surprisingly aggressive decision having simultaneously approved a new policy instrument that is intended to be a kind of safety net for government bond markets. The so-called ‘Transmission Protection Instrument’ aims to keep volatility in Eurozone government bond markets within reasonable levels but is unlikely to stop long-term market rates rising in absolute terms as it raises official ones. “The TPI…can be activated to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across the euro area,” the ECB said in its statement, adding that there will be no ‘ex-ante’ limit to the scale of interventions made under the program and noting that their scale “depends on the severity of the risks facing policy transmission”.ECB President Christine Lagarde will hold her regular press conference at 08:45 AM ET (1245 GMT), a quarter of an hour later than usual. More