ECB likely to hike interest rates twice by September
Economists are predicting that the European Central Bank (ECB) will raise interest rates twice within September.
They believe there is a high chance of the ECB increasing interest rates, expanding the cycle of tightening monetary policy to unprecedented levels until September.
Bloomberg News reported that Goldman Sachs, Uni Credit, and BNP Paribas have revised their trend forecasts following the ECB’s 0.25% interest rate hike on June 15. ECB president Christine Lagarde stated that more action needed to be taken to reduce the inflation rate to 2%.
The new forecast by Goldman Sachs expects the ECB to raise the rate to 4%.
The revised economic forecast showed a slower-than-expected decline in price pressures in 20 euro-zone countries, driven by a recovering labour market and strong wage expansion.
Nevertheless, most banks, including Morgan Stanley and Nordea, expect the ECB to raise interest rates only once in July, pointing to the economic impact of previous rate hikes, subdued economic expansion, and concerns of policymakers over excessive interest rate increases.
