ECB likely to raise rate by 50 bps in December

According to Governing Council member Gabriel Makhlouf, the European Central Bank is likely to raise borrowing costs by half a point this month. This decision is likely to follow a slowdown in inflation and lower growth.

Makhlouf himself perceives the move as the bare minimum to bring inflation back from its current record highs to the 2% target. However, the ECB Governing Council member also did not rule out a further increase, which will depend on the figures published in December quarterly economic forecasts.

In addition, the head of the Irish central bank said that everyone must prepare for the transition of interest rates to the restrictive level. At the moment it is too early to talk about the final point amid the general uncertainty. 

After the 75 basis point hike, ECB officials seem increasingly determined to lock in a slow rate hike at the upcoming meeting on December 14-15. Makhlouf's comments echoed those of his colleagues. On Sunday, for example, a senior French official, François Villeroy de Galhau, argued for a 50 basis point rate hike.