ECB May Hike Interest Rates Again in October Amid Stubborn Inflation

The European Central Bank (ECB) may be preparing to raise interest rates again, this time possibly as early as October. According to sources who spoke to Bloomberg News, tighter monetary policy could be necessary to combat stubbornly high inflation.

While the ECB raised its benchmark deposit rate by 0.25% last Thursday, from 2.25% to 2.50%, some economists believe this may not be enough. The market had anticipated three additional rate hikes, but these sources think that might be too aggressive a forecast.

Danske Bank's senior analysts Kristine Kundby-Nielsen and Rune Thyge Johansen agree with the need for further action. They point to a negative surprise in the central bank's forecast, which indicated inflation 'well above target for an extended period.' This 'hawkish tone,' as they put it, has led them to revise their forecast.