The European Central Bank (ECB) is likely to raise interest rates for the second time at its monetary policy meeting this week, with markets watching for signals of a third hike later this year. This comes after eurozone inflation surged to 3.3% in August, the highest in nearly three years and well above the 2% target. The meeting on Thursday (September 10) is expected to result in a 0.25% rate hike, underscoring the most hawkish monetary policy stance among the G7, amid challenges from an economy reliant on energy imports and conflicts in the Middle East. However, a larger-than-expected decline in core inflation is a positive factor, but the ECB appears unwilling to take risks after being criticized for responding slowly in 2022. Analysts from JPMorgan, Societe Generale, and BNP Paribas have adjusted their forecasts, expecting the ECB to raise rates again in December, while the decision on a third hike could be closely split.
BNP Paribas SA
Societe Generale S.A.
JPMorgan Chase & Co