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Furthermore, analysts at Citi predict an additional interest rate increase in March 2027.
Citi economists noted that the longer inflation stays elevated, the higher the chance it turns endogenous.
The ECB has recently increased each of the three main interest rates by 25 basis points. The current key deposit rate is 2.5%. The central bank confirmed its prediction that consumer prices in the Eurozone will increase by 3% this year. The inflation prediction for 2027 was increased to 2.5% from 2.3%, and for 2028 to 2.1% from 2%.
Initial data indicates that consumer prices in the Eurozone increased by 3.3% year-on-year in August, after a 2.9% rise in July. Consequently, inflation hit its peak since September 2023. Energy prices in the currency area increased by 14.3% in August, after a 10.3% jump in July.
Oil hovered around $104 a barrel on Friday due to the rising tensions in the Middle East and shipping limitations in the Strait of Hormuz. Market participants perceive no indications of a soon-to-come conclusion to the conflict.
source: ft.com
Citi economists noted that the longer inflation stays elevated, the higher the chance it turns endogenous.
The ECB has recently increased each of the three main interest rates by 25 basis points. The current key deposit rate is 2.5%. The central bank confirmed its prediction that consumer prices in the Eurozone will increase by 3% this year. The inflation prediction for 2027 was increased to 2.5% from 2.3%, and for 2028 to 2.1% from 2%.
Initial data indicates that consumer prices in the Eurozone increased by 3.3% year-on-year in August, after a 2.9% rise in July. Consequently, inflation hit its peak since September 2023. Energy prices in the currency area increased by 14.3% in August, after a 10.3% jump in July.
Oil hovered around $104 a barrel on Friday due to the rising tensions in the Middle East and shipping limitations in the Strait of Hormuz. Market participants perceive no indications of a soon-to-come conclusion to the conflict.
source: ft.com
