FRANKFURT: The European Central Bank slowed the pace of its interest rate increases on Thursday but signalled more tightening to come in what markets expect to be the final stage of its fight against inflation.

All ECB policymakers but one, Austria’s Robert Holzmann, backed the 25-basis-point increase in the ECB’s main deposit rate to 3.25%, which follows an unprecedented series of 75 and 50 basis point increases since last July.

Having raised rates by the most in its 25-year history, the ECB is moderating the pace of monetary policy tightening in light of data showing the euro zone economy is barely growing and that banks are turning off the credit taps.

But with inflation across the 20 countries that share the euro still stubbornly high, the ECB was at pains to say that borrowing costs will have to rise further.

“We are not pausing - that is very clear,” ECB President Christine Lagarde told a press conference. “We know that we have more ground to cover.”

She added that interest rates were not yet “sufficiently restrictive” to get inflation down to the ECB’s 2% target and made reference to future “policy decisions”, suggesting that more than one additional rate rise could be on the cards.

Some policymakers who spoke to Reuters after the meeting expected two or even three further hikes.