ECB Rate Hike Likelihood Limited in October: Standard Chartered

The European Central Bank's policy outlook remains unclear as it considers raising interest rates. Standard Chartered's analysis suggests that core inflation has risen only modestly since January, from 2.2% to 2.5% year-on-year in September. This limited increase does not indicate building inflationary pressures at an accelerating pace.

Lagarde emphasized the downside risks of rising yields to growth and inflation. The bank believes that policymakers are waiting for new macroeconomic projections before adjusting policy rates, with the next set scheduled for release alongside the December policy meeting.

Standard Chartered judges that the likelihood of a rate hike in October is limited, advising investors to patiently await updates to economic data and forecasts to identify the true inflection point in policy. The modest upward movement in core inflation serves as a key basis for concluding that the need for near-term interest-rate hikes has diminished.