ECB Prepares for Second Interest Rate Hike Due to Inflation – Bloomberg
The European Central Bank will almost certainly raise its key interest rate by 0.25 percentage points next week—to 2.5%—and is also considering a third rate hike at the end of the year.
The tightening of monetary policy is driven by rising energy prices due to the ongoing war in the Middle East and a surge in eurozone inflation to 3.3% in August, which significantly exceeds the 2% target.
The regulator is prioritizing preemptive measures to curb prices, seeking to avoid the delayed response for which the ECB was criticized during the 2022 inflation shock. Despite a certain slowdown in core inflation, Lithuanian Central Bank Governor Gediminas Simkus suggested that the September rate hike alone would not be sufficient, while analysts at JPMorgan, Societe Generale, and BNP Paribas have already revised their forecasts, anticipating an additional interest rate hike later this year.
Source: Bloomberg.
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