Commerzbank analysts say sustained inflation and rising core pressures leave the ECB no choice but to hike rates.
The European Central Bank is poised to raise interest rates as Eurozone inflation remains above 3%, driven by persistent core pressures. Analysts highlight firms’ plans to pass on higher energy costs and elevated consumer inflation as key factors.
Inflation has stayed above the ECB’s 2% target for months, with core inflation accelerating. Previous rate hikes have yet to fully curb price growth, signaling further tightening may be necessary.
Markets are pricing in a higher probability of a rate increase at the next ECB meeting, though the timing and magnitude remain uncertain.