ECB May Raise Rates Amid Rising Inflation, Analyst Predicts

Claus Vistesen from Pantheon Macroeconomics has indicated that the European Central Bank (ECB) might increase interest rates in the coming months. According to Jin10, inflation in the Eurozone rose to 2.5% in March and is expected to continue rising in the short term, stabilizing between 2.5% and 3.0% this year and next. Pantheon Macroeconomics forecasts that the ECB will raise rates by 25 basis points in both June and July. Despite this, due to weak economic performance, rate cuts remain a policy option. Vistesen noted, "We expect the ECB to attempt fine-tuning policy rates near the upper limit of the neutral range (around 2.5%) to balance the risks of rising inflation against the risk of economic recession."