ECB: Towards a historic increase in interest rates

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The decision is expected to be taken at today’s meeting

The ECB is expected to proceed with a new major increase in interest rates today, after the one in July, considering that the battle to deal with inflation outweighs concerns about the blow that an aggressive increase would bring to the eurozone economy.

Specifically, the choice will be between an increase of 50 basis points (half a percentage point) and 75 bp. (three-quarters of a percentage point), with expectations converging towards the biggest increase, but without this being certain. An increase of 75 m.p. it would be the biggest ever on the European Central Bank’s benchmark rate.

More rate hikes are expected in the coming months as price pressures steadily outpace even the most pessimistic forecasts.

After the statements of conservative members of the Board of Directors. by the ECB in favor of tighter monetary policy, markets now see an over 80% chance of a 75 basis point hike. A small majority of economists polled by Reuters make the same assessment.

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