- This comes as lagged price pressures fade out
- Rapid wage growth is keeping core inflation up and will remain high for some time
- This will take some time before easing slowly
- Outlook remains surrounded by considerable uncertainty
- Risks to the growth outlook are tilted to the downside
All things being equal, the ECB is likely to lean more towards a 25 bps rate hike next month. The narrative now is that price pressures are still holding up, in particular core inflation, and that is validating their decision to push with at least one more rate hike.
