Expert Predicts ECB Rate Hike Amid Middle East Conflict

Ebury analyst Matthew Ryan has indicated that ongoing conflicts in the Middle East are increasing the likelihood of a rate hike by the European Central Bank (ECB) rather than a cut. According to Jin10, the ECB typically overlooks the impact of supply shocks, but the recent inflation surge in the Eurozone following the Russia-Ukraine conflict may prompt heightened vigilance against secondary effects. Even before the outbreak of war, data such as significant wage negotiation increases had already suggested this trend. During Thursday's meeting, ECB President Christine Lagarde is expected to assert that the ECB will not permit a dangerous inflation spike. LSEG data shows that investors anticipate a rate increase of approximately 36 basis points in the Eurozone by the end of the year.