Published on Thursday, July 27, 2023

Europe | Hike or pause in September, question not resolved

Our forecast still leans towards a further rate hike in September (reaching a terminal rate of 4% for the deposit rate); however, recent data weaknesses and ECB communications before and during the meeting have increased the likelihood of a potential pause and the possibility of no further hikes.

Key points

  • Key points:
  • The ECB raised key interest rates by 25 bps as already preannounced
  • No guidance on rates for further meetings, future decisions will be data dependent
  • The ECB also announced that the remuneration of minimum reserves will be reduced to zero

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