ECB Prepares for Further Rate Hikes Amid Geopolitical Uncertainty

The European Central Bank (ECB) is expected to raise interest rates by 0.25 basis points, a decision that has been widely anticipated by analysts and the financial markets.

This move will increase the cost of borrowing in the eurozone to 2.5 percent, aimed at combating inflation and rising energy prices.

Economist Lorenzo Codogno believes that the ECB is becoming increasingly convinced that the current geopolitical shock will persist and push inflation upwards.

Codogno points out that economic agents have become more sensitive to inflation, and the pass-through could occur more rapidly than in the past.