The European Central Bank has voted to raise interest rates by 25bps to 4% in what may be its final hike of the cycle, after inflation forecasts for the region have continued to rise.
The ECB's Governing Council said today (14 September) that the central bank now forecasts average inflation will reach 5.6% in 2023, 3.2% in 2024 and 2.1% in 2025, with the upward revisions being credited largely to a higher path for energy prices. However, ECB projections for core inflation were revised slightly downwards to an average of 5.1% in 2023, 2.9% in 2024 and 2.2% in 2025. The central bank said that previous hikes continued to be "transmitted forcefully" into the economy, as financing conditions tighten and demand increasingly dampens. Markets split on ECB meeting outco...
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