Risk measurement agency Fitch Ratings estimates that the European Central Bank (ECB) will raise interest rates twice in 2022, in total 50 basis pointsbefore the end of the year, despite further growth risks due to inflationary pressures from the war in Ukraine.
Fitch believes that “inflationary pressures from the war in Ukraine have increased the likelihood that the ECB will raise interest rates in 2022, despite growth risks.”
Rating agency expects ECB to raise interest rate on core operations Refinance up to 0.5% and deposit facility to 0% before the end of the year, through two increments of 25 basis points each.
its predictions are based on high inflationAn increase in inflation expectations and an increase in price pressures since the start of the struggle, which will keep energy and food prices high in the coming quarters.
First increase, in July?
The president of the Bundesbank (central), Joachim Nagel, was in favor of the European Central Bank (ECB) on Tuesday.interest rates in july,
Nagel told a conference in Altville, near Frankfurt, that while “inflation in the euro area remains high,” action is needed.
“I expect asset purchases to end by the end of June and if new economic data and our new projections confirm this outlook in June, I would advocate for the first phase of ECB interest rate normalization in July,” Nagel said. “
The chairman of the Bundesbank believes that in the current situation “it is more important than ever for central banks to act on time” and that action should be “predictive, sequential and dependent on economic data” so that debtors can better Interest rates and risk premium to rise to a limited extent to withstand growth
Fitch predicts ECB will raise interest rates twice in 2022