Barclays Sees ECB Delivering Another Rate Hike in December Amid Inflation Pressures

Barclays believes the European Central Bank (ECB) will raise interest rates again in December, as inflation pressures persist. The forecast comes after the ECB's decision to increase its key rates by 25 basis points on Thursday. New projections showed that inflation is likely to stay above the 2% target for an extended period.

The attacks on military and energy assets across the Middle East have pushed oil prices back above $100 a barrel, complicating the ECB's fight against price pressures. Traders are pricing in a 93.9% chance of a quarter-point rate hike from the ECB in December, according to LSEG data.

Goldman Sachs also expects the central bank to hike rates by 25-basis points in December, saying it would take rates into 'mildly restrictive territory'. Barclays sees little chance of an October move, but expects the central bank to wait until December when policymakers will have updated economic forecasts in hand.