ECB is certain to raise interest rates for the second time this year... Bloomberg ‘reaffirms hawkish stance’

(Seoul = Yonhap News) Reporter Joo Jong-guk = Bloomberg News reported on the 6th (local time) that it is becoming certain that the European Central Bank (ECB) will raise the benchmark interest rate for the second time this year.

Bloomberg predicted that the ECB is expected to confirm that it is the most hawkish central bank among the G7 with its second interest rate hike.

Bloomberg reported that as the interest rate hike this month has become a fait accompli, the market's attention is already shifting to whether there will be an additional interest rate hike in December.

The ECB is paying attention to two issues: the continuation of the war in the Middle East and the rise in international oil prices.

The Eurozone's August inflation rate was 3.3%, the highest in about three years. This is significantly above the target of 2%.

In the case of the U.S. Federal Reserve (Fed), the Consumer Price Index (CPI) released next week is expected to have a significant impact on whether to raise interest rates, but the ECB has expressed a clear position on the need for preemptive tightening.

If economic growth is solid, the ECB's interest rate hike will have more strength.

There is a possibility that prospects for whether the ECB will raise interest rates further within the year are tense.

While Lithuania's central bank governor Gediminas Simkus said that an interest rate hike in September alone would not be enough, German Bundesbank president Joachim Nagel, who is considered hawkish, appears cautious in making related comments.

Most economists expect this week's interest rate hike to be the last this year. However, analysts at JP Morgan, Societe Generale, and BNP Paribas have recently revised their forecasts to suggest an interest rate hike.