What do economists expect from the ECB? – Bloomberg HT
According to economists surveyed by Bloomberg, the European Central Bank (ECB) will accelerate its fight against inflation by increasing interest rates four more times.
Economists participating in the survey shared that the overnight deposit rate, which the ECB keeps at 2.5 percent, will increase by 50 basis points at the meeting to be held next week. In each meeting to be held after this meeting, it is expected that the overnight deposit rate will be increased to 3.75 percent in July with a 25 basis point interest rate hike.
Goldman Sachs and Deutsche Bank estimate that 3.75 percent will be reached in June, while JPMorgan and Citi estimate the ECB will likely stand at 3.5 percent.
Veronika Roharova, Head of Economy for the Eurozone at Credit Suisse, said that amid sharply falling energy prices and rising core inflation, the biggest challenge in the coming months will be to adjust policy tightening at appropriate rates.
ECB Chief Economist Philip Lane said borrowing costs could stay at their peak for a “reasonable number of quarters”, while analysts expect these prices to stay there for a short while compared to the previous survey.
ECB rate increased by 50 basis points in February
In its meeting held on 2 February, the European Central Bank increased the interest rates by 50 basis points in line with the market expectations, and the overnight deposit rate was 2.5 percent; It had raised the overnight lending rate to 3.25% and the policy rate to 3%.
In the text of the resolution, it was stated that “The Bank intends to increase the interest rate by another 50 basis points at the monetary policy meeting to be held in March”.