ECB governors reportedly see December hike likely followed by pause
TLT•Three ECB policymakers expect a December rate hike to 2.75%, followed by a pause as higher bond yields weigh on growth and inflation, sources said.
1. December hike expected
Three ECB policymakers expect the central bank to raise rates on December 17, taking its deposit rate to 2.75%, barring a sudden collapse in energy prices. The ECB left rates unchanged on Thursday, and President Christine Lagarde signaled another hike in December, warning that high and rising energy costs were fueling inflation risks.
2. Yields may weigh on outlook
The policymakers expect the ECB to pause after December. Estimates circulated before Thursday’s meeting showed that the recent rise in bond yields would lower cumulative economic growth by 100 basis points and inflation by 90 basis points in 2027-28 compared with the September baseline projection.
