ECB Rate Hike Expectations Diverge Amid Ongoing Market Uncertainty

European Central Bank (ECB) rate hike expectations continue to diverge among analysts. ANZ Bank predicts another quarter-point increase in December, taking the deposit facility rate to 2.75%, citing market pricing and the impact of the escalating Middle East conflict on energy prices.

This outlook contrasts with ING's assessment that Thursday's confirmed 25 basis point hike was an 'insurance' move aimed at preventing higher energy costs from feeding into broader price pressures, rather than a response to genuine inflation pressure.

ING notes that core and services inflation, as well as survey-based inflation expectations, show little evidence of second-round effects from higher energy prices. The bank also points out that the ECB's newly updated staff projections leave headline inflation unchanged at 3% for this year.