ECB Rate Hike Predictions Revised by J.P. Morgan and BNP Paribas

J.P. Morgan and BNP Paribas have both revised their forecasts for the European Central Bank's (ECB) interest rate decisions, now predicting a rate hike of 25 basis points in December.

This change comes despite previous expectations that the ECB's monetary tightening cycle would end without a rate hike in December. Both institutions cited persistent inflation risks and high energy prices as reasons for their revised forecasts.

BNP Paribas noted that the duration of the energy shock and the resilience of the economy increase the likelihood of secondary inflationary effects, which could lead to further interest rate hikes if evidence emerges.