Bloomberg Economics has forecasted that the European Central Bank would continue to hike interest rates this month. “We forecast the Governing Council will push through a 25-basis-point increase for a final time in this cycle, bringing the deposit rate to 4.0%,” Bloomberg announced in a statement.
With the ECB set to meet on Thursday, there is still the possibility of an interest rate pause depending on how policymakers digest the latest round of European economic data. Should this hike be implemented, it would be a 10th consecutive hike in borrowing costs. Although this is the most uncertain ECB decision to date in the markets’ eyes, Dutch official Klaas Knot claimed during an interview that observers could be underestimating the likelihood of a hike.
President Christine Lagarde is expected to convey a message on Thursday that the ECB will not loosen its grip on inflation, regardless of what direction the central bank takes at its policy meeting.