ECB Faces Third Interest Rate Hike Amid Persistent Energy Price Pressures

JPMorgan now expects the European Central Bank (ECB) to raise interest rates for a third time in December, taking the policy rate to 2.75%, following a 'near-certain' second hike to 2.5% at next week's meeting.

Economist Greg Fuzesi said this reflects an interaction between more persistent energy price pressures, solid growth, sticky core inflation, and a neutral rate the ECB sees edging higher.

Markets are now largely pricing in a fourth hike after that, though Fuzesi said this remains outside JPMorgan's base case.