ECB Rate Hikes Likely to Continue Amid Rising Inflation Pressures

Economists are increasingly confident that the European Central Bank (ECB) will raise interest rates again, with some predicting two more hikes. Analysts at Nomura and Citi now expect two more rate increases in December and March, which would take the deposit rate to 3%. Other banks like HSBC and UBS anticipate only one additional move. However, not all economists agree, with some still thinking that the ECB is done raising rates.

The shift in forecasts comes as energy markets and the ECB's own outlook suggest stronger inflation pressures. This has led analysts to reassess their previous expectations for euro-zone interest rates. The Nomura and Citi predictions would see the deposit rate rise from its current level of 2%.

Some economists still caution that the ECB may not need to raise rates again, pointing to the bank's own assessment that inflation is likely to ease in coming months. However, for now, many are sticking with their revised forecasts for additional rate hikes.