ECB Seen Raising Rates by 0.25 Percentage Point in December, Then Pausing Further Tightening
Summary
- A report said European Central Bank policymakers are expected to raise rates by 0.25 percentage point in December and then pause further tightening.
- Reuters, citing multiple sources, said the deposit rate is expected to be raised to 2.75% from 2.50% on December 17.
- Higher bond yields are estimated to reduce euro-zone economic growth by 1 percentage point and inflation by 0.9 percentage point in 2027 and 2028.
Forecast Trend Report by Period
European Central Bank policymakers are expected to raise the benchmark rate by 0.25 percentage point in December and then pause further tightening, Reuters reported.
Reuters, citing three sources on October 29, said ECB policymakers expect to raise the deposit rate to 2.75% from 2.50% on December 17.
The sources said a December rate increase is all but certain unless energy prices fall sharply.
ECB policymakers are also expected to pause further rate increases after the December move. That view reflects the impact rising bond yields could have on euro-zone growth and inflation.
Higher bond yields are estimated to reduce euro-zone economic growth by 1 percentage point and inflation by 0.9 percentage point in 2027 and 2028.
JH Kim
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