According to Goldman Sachs, the European Central Bank is likely to raise interest rates by 75 basis points at its October and December meetings.
The team of economists led by Jari Stehn had already seen a more moderate increase of 50 basis points at the last meeting of the ECB of the year, but “we believe that the increase in inflation in the fourth quarter will make it difficult to slow the pace of the increase. ”They said in a statement.
After which, according to the US investment bank, it expects a move of 50 basis points in February – double the previous forecast – “as the rate policy becomes more restrictive, the inflation numbers stabilize and it will become clear that the area of the euro is in recession ”, the economists continued.
“According to our updated forecast, the terminal rate increases to 2.75%, taking the policy into clearly restrictive territory.”
The ECB has already increased its borrowing costs by 125 basis points in its last two meetings this month by 75 basis points.
The question is how to proceed from now on as rising prices are accompanied by increasingly pronounced forecasts of a recession.