European Central Bank: September hike seen with energy risks – Nomura
Nomura’s Euro area team expects the European Central Bank to raise rates by 25 basis points to 2.50% at the 10 September meeting, citing higher HICP inflation and resilient growth.
Nomura analysts anticipate the European Central Bank (ECB) will hike rates by 25 basis points to 2.50% during the September 10 meeting, citing surging HICP inflation from the Iran war and the euro area's economic strength. ECB officials have expressed hawkish comments, indicating additional tightening risks could persist through December 2026.
While the ECB's December rate hike risk hinges on Brent crude oil and Dutch TTF natural gas price dynamics, the former influences inflation more swiftly than the latter due to its effect on vehicle fuel prices in the HICP basket. Despite potential December hikes, the bulk of price transmission from oil or gas price changes is immediate.
Furthermore, Fed Chair Kevin Warsh's upcoming Jackson Hole speech adds intricacy to the ECB's decision-making process.
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