ECB Expected To Raise Policy Rate By 25 Basis Points At Thursday Meeting

Economists at SEB said the European Central Bank may raise its policy rate by 25 basis points at its meeting this Thursday. According to Jin10, they argued that inflation risks linked to higher energy prices could prompt a pre-emptive rate increase because indirect and second-round inflation effects have not yet appeared in the data. The economists, Pia Fromlet and Marcus Widen, said they expect ECB President Christine Lagarde to spend significant time at the press conference discussing the latest staff projections and risk assessment. They added that uncertainty is likely to be a central theme, which would support a more wait-and-see approach going forward. They also said they expect the ECB will not make any advance commitment on further rate hikes.