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(Boursier.com) — No more doubt. Traders are confident the European Central Bank will deliver a second three-quarter point rate hike in October as the institution steps up its fight against runaway inflation. A few days before the release of the latest inflation data for the eurozone (Friday), money markets are now pricing 100% for a move of 75 basis points from the ECB next month. An increase of this magnitude would double the Bank’s key rate to 1.5%, its highest level since 2008.
Expectations for further strong action from the ECB have intensified after a flurry of hawkish comments from officials at the Frankfurt Institution, as price rises in the region likely set a new record high in September, close to the 10% mark. “It’s hard to argue against a 75 basis point hike at the October meeting,” Citigroup rates strategist Antoine Gaveau told Bloomberg.
ECB Vice-President Luis de Guindos said this morning that record inflation was the biggest problem facing the region’s economy, threatening investment and consumer spending as they rise. were generalizing.
The ECB is due to hold its next policy meeting on October 27. It raised its deposit rate by 75 basis points earlier this month, its biggest rate increase in more than two decades, despite worries about the growth outlook. “Given the outlook for inflation, we decided to raise our key interest rates by 75 basis points at our last monetary policy meeting. We expect to raise rates further in future meetings to dampen demand. and keep inflation expectations anchored”, has also just indicated Christine Lagarde before the Committee on Economic and Monetary Affairs of the European Parliament.
Lagarde: Inflation rose further to 9.1% in August. Price pressures are spreading across more sectors, in part due to the impact of high energy costs. We expect inflation to stay above our target for an extended period. pic.twitter.com/yXI1ElGD1v
— European Central Bank (@ecb), through Twitter
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