ECB Interest Rate Hike Imminent Amid Inflation Concerns, Predict Barclays and Goldman Sachs

Barclays and Goldman Sachs are predicting that the European Central Bank (ECB) will hike interest rates by 25 basis points in December. This move is expected to address rising inflation concerns fueled by tensions between the U.S. and Iran, which have driven up energy costs.

The ECB's decision comes as new projections suggest that inflation will persist above its 2% target for some time. According to Barclays, the bank expects inflation to reach its target by late 2027 through incremental 25-basis point hikes.

ECB President Christine Lagarde has labeled the bank's recent decision a 'no-brainer,' emphasizing data-driven policy-making. While an October rate change seems unlikely, Barclays foresees December as the pivotal moment for an adjustment based on updated economic forecasts.