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ECB seen likely to tighten again, with an October rate move possible

The expected further tightening comes after the ECB’s latest 0.25% hike, as officials try to prevent upside inflation risks from spreading amid elevated energy prices tied to ongoing conflicts.

Reported · Written up by our desk · Central Banks

FXStreet, citing Reuters sources, said European Central Bank officials are expected to tighten monetary policy further in the months ahead, with a possible rate increase in October.

The update links the ECB’s tightening bias to inflation risks and recent energy price spikes, which were reportedly boosted by a prolonged US-Iran war and the Russia-Ukraine conflict.

Reuters sources also said the ECB recognized growth risks are tilted to the downside, even as inflation risks remain skewed upward, after it raised rates by 0.25% for the second time this year.

At the ECB press conference, President Christine Lagarde said she could not anticipate the next move and reiterated the ECB’s meeting-by-meeting approach.

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Sources