The European Central Bank (ECB) decides this Thursday whether to raise interest rates again or keep them unchanged, in a meeting in which the evolution and expectations of economic data gain special weight.
“Today there should be a new rise in interest rates”
The result of the meeting of the Board of Governors of the ECB does not provide consensus in the forecasts of the markets and analysts.
ECB. “Stubborn” inflation makes an interest rate hike this Thursday more likely
At the last meeting, in July (in which the institution decided to raise interest rates by 25 basis points), ECB President Christine Lagarde stated that rates could remain at the same level or undergo a new increase. depending on macroeconomic data.
The hawks of the ECB Council – the members most in favor of a restrictive policy to combat inflation – can pressure the entity to increase the price of money, considering that inflation is not yet sufficiently controlled, while, on the other hand, In the Council there are doves (as opposed to the position of the hawks) to defend a pause, arguing the impact of the increases on families and the economy.
Recently, the governor of the Bank of Portugal (BdP), Mário Centeno, warned that the risk of “do too much“In monetary policy it is beginning to be material.
According to the latest Eurostat data, The inflation rate in the euro area remained unchanged.in August compared to July at 5.3%, but core inflation (which does not take into account energy or food as they are more volatile prices) moderated to 6.2% (6.6% in July).
This Monday, the European Commission lowered the economic growth forecast for the euro zone for this year by three tenths, to 0.8%, mainly due to the slowdown in activity in Germany, which will contract by 0.4% in 2023, and predicts a few months of slowdown. .
This Thursday, the ECB also publishes new macroeconomic forecasts, in which it could revise downward expectations for economic growth and Inflation expectations increase compared to those announced in June, according to analysts.
The deposit facility rate is currently set at 3.75%, the main refinancing transaction interest rate at 4.25% and the permanent liquidity lending facility interest rate at 4.25%. ,5%.
Source: Observadora
