Lee Sue Ann, economist of UOB Groupanalyzes the last ECB monetary policy meeting (June 15).
statements conclusions
The European Central Bank (ECB) decided to raise its three official interest rates by 25 basis points. It also confirmed that it will stop reinvestments under the asset purchase program from July 2023, as announced in May. To justify the hike, the ECB stated in the accompanying publication that “inflation has been coming down, but is expected to remain too high for too long.”
Despite the recent slowdown in inflation, the ECB raised its headline and core inflation expectations for this year and next. It now expects headline inflation to average 5.4% (previously 5.3%) in 2023, 3% (previously 2.9%) in 2024 and 2.2% (previously 2.1%) in 2025. Core inflation would be at 5.1% in 2023, 3% in 2024 and 2.3% in 2025.
There is no meeting in August and although it looks like the ECB will raise rates again in July, Lagarde refrained from giving any hints about what it will do in September. The new quarterly forecasts for September will again offer the ECB the opportunity to reassess its views on inflation and growth. For now, we are still expecting a final 25 basis point rise in July. However, the risks of further rate hikes beyond July are tilted to the upside.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
