abrdn: Grote onzekerheid over vooruitzichten monetaire beleid ECB

abrdn: Grote onzekerheid over vooruitzichten monetaire beleid ECB

31 januari 2023

ECB
ECB (07)

Paul Diggle, Deputy Chief Economist at abrdn, comments on the upcoming ECB meeting.

The ECB meeting next week is very likely to see a 50bps rate rise, taking the deposit rate to 2.5%. This follows signs that Eurozone economic activity is holding up slightly better than previously feared; core inflation is still rising, and recent rhetoric from Christine Lagarde has been hawkish. 

Beyond the rate increase itself, we will be watching a couple of other developments closely. 

First will be the operational details of “quantitative tightening”, due to begin in March. The ECB will want to make QT as undramatic as possible, aiming for gradual and passive so as not to rock financial markets. It can probably achieve that aim at first. But if and when fiscal and political fireworks reignite in the Eurozone - as they no doubt will at some point - the ECB may find QT difficult to sustain.

Second will be signalling about the rate path later in the year. We are forecasting another 50bps hike at the March meeting as well, taking the deposit rate to its terminal rate of 3%. But both a step down to 25bps increments at that meeting, and additional rate hikes later in the year if core inflation remains persistent, are possible.

Put another way, there is considerable uncertainty about the monetary policy outlook at present.

Gerelateerde berichten