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ECB Watch: Forbidden to hike
The pressure for the ECB to act has increased considerably, but the central bank’s earlier guidance rules out hiking rates at the meeting next week. Along with updated inflation forecasts, the ECB’s signals will all but guarantee a rate hike in July. • The ECB is set to confirm next week that it plans to end asset purchases very early in July and hike rates by 25bp later that month. • While the door is not totally shut for a 50bp move in July, it would be quite surprising for the ECB to start its hiking cycle with such a big step, especially as Lagarde recently signalled the ECB’s first moves would take ... (full story)