ECB policymakers are likely to follow through on their intention to raise rates by 25bp next week and signal that a bigger rise (probably 50bp) is coming in September. We suspect that the Bank will not agree all the details of its planned Transmission Protection Mechanism next week but will again promise that it is in the works. Further ahead, the Bank will need to raise rates rapidly between September and December and make more asset purchases to contain peripheral spreads.
ECB Preview (19th July, 10:00 ET/15:00 BST): Our Europe team will be briefing on what to expect from the ECB ahead of its crunch July meeting. They’ll be talking about lift-off for rate hikes, what a weak euro means for policy`, the Transmission Protection Mechanism and much more. Register now.
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