ECB to wait until Q4 to raise rates despite rampant inflation – Reuters poll
“The European Central Bank will wait until the last months of this year for its first interest rate rise in over a decade,” said March 1-4 poll of economists by Reuters. The survey also showed that fewer economists expect an earlier move.
“That consensus from a slight majority of forecasters, 27 of 45, polled March 1-4, comes despite news that inflation in the euro zone hit 5.8% in February, defying the central bank's own expectations for a decline,” adds Reuters.
Key quotes
Of the 33 of 45 respondents who expected the deposit rate to rise from a record low of -0.50% this year, 18 saw it at -0.25% at year-end, nine had it lower than that and six saw it higher.
There was no strong consensus either on which month the ECB would end its Asset Purchase Programme (APP).
Forecasts for inflation this year have risen for the ninth consecutive survey - up 0.3 and 0.6 percentage points for the first and second quarters to 5.4% and 5.3% respectively, more than double the ECB's 2.0% target.
Economic growth in the bloc was expected to peak at 1.0% next quarter and then slow to 0.8% and 0.6% in the third and fourth quarters, respectively. This is a downgrade from 1.2%, 1.0% and 0.7% predicted just a few weeks ago.
On an annual basis, it was expected to grow 3.8% this year and 2.5% next, from 3.9% and 2.5% predicted last month.
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Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
