What will be the decision on interest rates at the ECB meeting?

The European Central Bank could raise interest rates at its meeting tomorrow to combat inflation.

As the dilemma of inflation and recession continues in Europe, the European Central Bank (ECB) continues to increase interest rates. The ECB is expected to increase the policy rate by 25 basis points at its meeting tomorrow.

CONCERNS ABOUT INFLATION CAN BE OVERCOMED

Analysts say the fact that inflation remains high may offset concerns about growth and recession.

ING Group chief economist Peter Vanden Houte said the ECB would remain determined to fight inflation.

Houte said: “The ECB will need to continue raising interest rates to continue the fall in inflation. However, we also see growth prospects worsening. “For this reason, the ECB’s interest rate raising measures will be cautious,” he said.

THE MOST DIFFICULT POINT OF THE CYCLE

Bas Van Geffen, senior macro strategist at Rabobank, also noted that the ECB’s governing council has probably reached the most difficult point in the interest rate hiking cycle.

Geffen said the downward trend in inflation data is not as compelling as expected and said growth prospects have deteriorated significantly.

In July, the ECB increased the refinancing rate by 25 basis points to 4.25 percent, the deposit rate to 3.75 percent and the marginal financing rate to 4.50 percent.

With this increase, interest on ECB deposits reached their highest level since October 2000. (BRITISH AUTOMOBILE CLUB)