PARIS (Reuters) – BNP Paribas said on Friday it expects a three-quarter point hike in rates from the European Central Bank (ECB) next week at its monetary policy meeting.
“With the ‘hawks’ continuing to gain the upper hand, we believe the ECB will propose a 75 basis point increase at its September 8 meeting,” analysts at the French bank wrote in a note.
“Even though the outlook for growth has deteriorated further, key members of the Governing Council have been unresponsive to this. At the same time, there is a greater focus on the headline inflation data, which has continued to surprise by their rise,” they add.
BNP Paribas also expects a significant monetary tightening cycle with rates that could peak at 2% by the end of the first quarter of 2023.
Eurozone money markets on Thursday estimated the probability of a 75 basis point hike in ECB rates at almost 80%.
(Yoruk Bahceli report, French version Claude Chendjou, edited by Matthieu Protard)
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