European Central Bank policymakers expect to raise interest rates in December and then pause, three sources told Reuters. The ECB held rates on Thursday, and President Christine Lagarde hinted at another hike.
Three ECB policymakers expect a December hike to fight high, energy-led inflation, and then a pause, they told Reuters after Thursday's meeting. The central bank left rates unchanged in a well-telegraphed move.
Lagarde hinted at another hike in December, warning that high and rising energy costs were fuelling inflation risks. The three policymakers said a hike on December 17 was all but certain, barring a sudden collapse in energy prices. It would take the deposit rate to 2.75%.
Yet they expected to pause afterward. ECB estimates circulated before the meeting showed that the recent rise in bond yields would lower growth by a cumulated 100 basis points and inflation by 90 basis points in 2027-28, compared with the September baseline projection.
An ECB spokesperson declined to comment.
Source: Reuters via Investing.com
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