Overview
- Reporting on Sunday says ECB officials and four sources close to the Governing Council view a June 11 rate increase as nearly certain.
- Eurozone headline inflation has risen to about 3 percent from the bank’s 2 percent target because higher energy costs have fed through to consumer prices.
- Governing Council officials including Martin Kocher and Joachim Nagel have warned inflation risks are higher than expected and that action would be unavoidable if Hormuz shipping stays blocked.
- Policymakers plan to avoid committing to a July move and will use updated growth and inflation projections published at the June 10–11 meeting to shape any further tightening.
- Markets are pricing multiple hikes over the coming year and analysts such as Deutsche Bank forecast quarter-point moves in June and September to take the policy rate toward roughly 2.50 percent, raising borrowing costs for households and businesses.