ECB Rate Hike Forecast Revised to December Amid Persistent Inflation Risks

Two major brokerages, J.P. Morgan and BNP Paribas, have revised their forecasts for the European Central Bank's (ECB) interest rate hike in December.

The banks now expect a 25-basis-point increase in December, reversing their earlier predictions that the ECB's tightening cycle would end without a December hike.

This change in expectations comes as persistent inflation risks and elevated energy prices continue to strengthen the case for further monetary tightening.

Markets have already priced in a 99.2% probability of a quarter-point hike at the ECB's September 10 policy meeting, according to LSEG data cited.