ECB Widely Expected to Raise Rates on the 10th Amid Oil Surge and Inflation Concerns

[Financial News] Amid concerns over inflation driven by a sharp rise in international oil prices, both the European Central Bank (ECB) and the Bank of England (BoE) are increasingly likely to raise interest rates further.
According to U.S. media reports on the 9th local time, OIS market pricing has shifted toward expectations that the ECB will raise its policy rate by roughly 90 basis points by December next year. This would be the largest increase in the current tightening cycle.
A rate hike is widely expected at the ECB’s monetary policy meeting scheduled for the 10th. The shift in the swaps market reflects concerns that the recent surge in international oil prices could reignite inflation.
In June, the ECB raised its policy rate by 0.25 percentage points as inflation concerns grew amid the war in Iran. It was the ECB’s first rate hike in two years and nine months, since September 2023.
The BoE, which will hold its meeting on the 17th, is also expected to deliver an increase of nearly the same size, based on swaps market pricing. If so, its policy rate would reach its highest level since February last year.
[email protected] Hong Chae-wan Reporter