The ECB must decide on Thursday to raise interest rates by 50 basis points

The European Central Bank (ECB) is expected to announce a new rate hike of 50 basis points after Thursday’s meeting to continue trying to contain inflation, analysts said.

The first meeting of the year of the ECB will take place this Thursday, after closing 2022 in total with a series of increases of 250 basis points.

At its last meeting, in December, the institution led by Christine Lagarde slowed the pace of rate hikes but warned it would continue to raise them “significantly”, showing determination in the fight against inflation, which is “too high” remains.

At that point, the ECB decided to slow down and opted to raise its interest rates by 50 basis points, setting the main refinancing rate at 2.5%, the highest level since late 2008.

According to the money market, an increase of 50 basis points is expected and the ECB should also confirm an increase of another 50 basis points at its next meeting on March 16, said Paulo Rosa, senior economist at Banco Carregosa.in statements to Lusa.

Along the same line, in statements to Lusa, Filipe Garcia, president of IMF – Financial Markets Information, believes that “the ECB should rise by 50 basis points [os juros]indicating that the work is not done yet and that despite positive signs in the evolution of inflation, there are also signs in the economy, so monetary tightening should continue throughout the semester.”

Franck Dixmier, global director of bond investments at Allianz Global Investors (AllianzGI), who also points to a 50 basis point increase, expects in a “research note” that “the president of the ECB will continue to insist on her aggressive message.” , while the expectations of the other investors about the final interest rate are very moderate”.

Goldman Sachs also points to a steady rate of 50 basis point increases in a research note, taking into account, however, that the closing price “depends on the data”.

The interest rate applicable to the main refinancing operations and the interest rate of the marginal lending facility and the deposit facility are currently 2.50%, 2.75% and 2%.