ECB Set for December Rate Hike as Euro Zone Inflation Hits 4.0%
Updated
Updated · Reuters · Nov 4
ECB Set for December Rate Hike as Euro Zone Inflation Hits 4.0%
3 articles · Updated · Reuters · Nov 4
Summary
December now looks like a done deal for another ECB rate increase after euro zone inflation climbed to 4.0% in October, a three-year high and double the bank's target.
Energy prices drove the surge, with energy inflation hitting 20%, while core inflation held at 2.5%, suggesting broad second-round wage and price effects have not yet taken hold.
Food inflation still accelerated to 4.6%, services rose to 3.3% and industrial goods to 1.2%, reinforcing concern that higher fuel and gas costs could spread more widely in coming months.
Markets are pricing two to three more ECB hikes over the next year toward a 2.5% deposit rate, with expectations shifting alongside oil prices and low gas storage adding upside risk.
Sweden's Riksbank raised rates on Wednesday and the Bank of England is expected to lift its key rate to 4.00% on Thursday, underscoring a broader European tightening cycle.