ECB Expected to Signal Further Rate Hikes

The European Central Bank is expected to indicate its intentions to lift interest rates when it meets later this week. In March, the ECB used the phrase “strong vigilance” to describe its outlook just prior to lifting rates a quarter point. Similar language is expected at this week’s meeting which suggests a rate increase will take place in June.

Inflation continues to grow at its fastest rate in three years and this has caused analysts to move the timetable for interest rate changes forward by a month.

“I expect them to send a signal for a move in June. We shifted (our view from July) simply because the leading indicators for April started to come in on the fairly resilient side,” said Berenberg Bank economist Holger Schmieding.

Source: Reuters

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