ECB to wait until Q4 to raise rates despite rampant inflation

“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.

Read: EUR/USD renews 22-month low near 1.0850 as Ukraine woes escalate, US inflation, ECB eyed

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.