The European Central Bank policymakers are calling for a swift and decisive move at the upcoming meeting next week amid near-double-digit inflation rate.
Euro area annual inflation was 8.9 % in July 2022, up from 8.6 % in June 2022. Meanwhile, economists expect inflation to reach 9% in August and will hit double digits in the autumn and remain higher for longer as a result of the surge in gas prices and lower output from Russia to the bloc.
Policymakers are starting to show concern on rising inflation that will go far beyond its 2% target, which will indicate a loss of confidence in the ECB’s inflation-fighting powers.
The market is priced in a 50 basis point rate hike in September and high probability for a 75bps hike.
Dutch central bank chief Klaas Knot and Estonia’s Madis Müller both nodded for a 75bps hike.
ECB board member Isabel Schnabel and French central bank chief Francois Villeroy de Galhau called for forceful or significant rate hikes.
Danske Bank earlier said that the European Central Bank will raise the policy rate by 75 basis points next week as inflation is hovering near double digits.
The Danish bank stated that it believed the euro area will face a recession and the ECB will hike into that.
The bank added that it also acknowledged that even without the ECB tightening, the economy