The European Central Bank (ECB) will decide this Thursday whether to raise interest rates again or leave them unchanged, at a meeting where developments and expectations for economic data will take on particular weight.
The results of the meeting of the ECB Governing Council do not bring consensus in the forecasts of the market and analysts.
At its last meeting in July (at which the institution decided to raise interest rates by 25 basis points), ECB President Christine Lagarde said that rates could remain at the same level or undergo further increases, depending on the situation. macroeconomic data.
Hawks on the ECB’s Board – members who are most supportive of restrictive policies to fight inflation – could pressure the organization to raise the price of money because they believe inflation is not yet sufficiently under control. On the other hand, there are doves on the Council (as opposed to hawks) advocating a pause, arguing about the impact of the increase on families and the economy.
Recently, Bank of Portugal (BPO) Governor Mario Centeno warned that the risk of “too much” in monetary policy was starting to become significant.
According to the latest Eurostat data, eurozone inflation remained unchanged in August from July at 5.3%, but core inflation (which excludes energy and food items because their prices are more volatile) fell to 6.2. % (6.6% in July).
This Monday, the European Commission cut its economic growth forecast for the eurozone for this year by three tenths, to 0.8%, mainly due to the slowdown in activity in Germany, which will contract by 0.4% in 2023, and forecast several months of slowdown.
The ECB will also publish new macroeconomic forecasts this Thursday, in which it could revise economic growth expectations downward and inflation expectations upward from those announced in June, analysts said.
The rate on the deposit facility is currently set at 3.75%, the interest rate on major refinancing transactions is 4.25%, and the interest rate applicable to the standing liquidity facility is 4.5%.
Author: Lusa
Source: CM Jornal
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