Deutsche Bank Expects ECB to Hike Rates Again in December

Deutsche Bank has revised its forecast for European Central Bank (ECB) interest rates, expecting a more aggressive tightening of monetary policy in response to ongoing energy price pressures and inflation risks.

The bank now expects the ECB to raise interest rates by 25 basis points in December, in addition to a September hike. This marks a significant shift from its previous forecast, which had expected interest rates to peak at 2.5%, slightly above the ECB's current deposit facility rate of 2.25%.

The revised forecast is based on the bank's assessment that energy price shocks will be more prolonged than previously thought, and economic growth will be stronger than anticipated. This has led Deutsche Bank to increase its terminal rate forecast to 2.75%, up from its previous expectation of 2.5%.