Nordea Predicts Three More ECB Rate Hikes as Inflation Persists

The European Central Bank (ECB) is likely to deliver three more rate hikes this year as inflation remains above target, according to Nordea's analysis. The Nordic financial group expects the ECB to raise its deposit rate by 25 basis points at each of the next three meetings, citing persistent price pressures in the euro area.

Nordea's assessment suggests that the ECB's policy path is not yet complete, with core inflation remaining elevated due to strong wage growth and services demand. This outlook is more hawkish than current market pricing, which had begun to anticipate a pause after the summer.

The ECB has already raised rates by 375 basis points since July 2022, bringing the deposit rate to 3.25%. President Christine Lagarde has repeatedly stated that future decisions will be data-dependent, leaving the door open for further moves.