With inflation in Germany refusing to fall, pressure is set to grow on the European Central Bank (ECB) who have so far resisted raising interest rates, unlike counterparts the US Federal Reserve and Bank of England.
In recent comments to CBS the bank’s president Christine Lagarde insisted inflation was “a different beast” in Europe with action by the ECB unable to lower energy prices.
However others in the ECB have begun to hint at more intervention with Governing Council member Martins Kazaks saying up to three hikes were possible by the end of the year.
Writing in a briefing not Carsten Brzeski, Global Head of Macro at ING Think, observed: “With the last ECB meeting and recent comments by ECB officials, it is clear that a consensus view has emerged on ending the so-called unconventional measures, ie net asset purchases and negative deposit rates before the end of the year.
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