ECB to raise rate by 75 bps on Oct. 27, according to analyst polls

According to a Reuters poll data, in order to curb inflation, the European Central Bank is preparing for the second time a major rate hike at the upcoming monetary policy meeting. This time, the plan is to raise rates by 75 basis points. The main problem is that inflation has already exceeded its target five times.

Energy prices continue to rise at a tremendous rate around the world. This is one of the reasons for greater growth in inflation.

According to a Reuters poll, inflation will peak at 9.6% for the quarter. The ECB inflation target a month ago was 10%, on the other hand, now the ECB has lowered it to 2.0%. Thus, although analysts are predicting a decline in inflation, reaching the 2% target seems unlikely even by the end of next year.

Brian Martin of Australia and New Zealand Banking Group noted that despite fast-growing inflation, there will be no increase of more than 75 basis points as the European Central Bank needs to behave more cautiously with bond spreads. Nevertheless, many analysts expect a tougher tightening policy from the ECB.

More than 60 analysts took part in the poll. Most of them believe that the ECB will raise the rate by 75 basis points. Thus, the refinancing rate will be 2% and the deposit rate will be 1.5%.