The ECB is not going to raise its interest rates next week and policymakers are likely to say they will need to see more evidence of second-round effects on inflation before doing do. We think the most likely outcome is for the Bank to leave rates unchanged indefinitely. But the ECB may raise interest rates in the coming months, particularly if the Strait of Hormuz remains blocked for much longer or if there is more permanent damage to energy infrastructure – both of which are, of course, very plausible.
We will be hosting an Online Drop-In on the latest decisions from the Fed, ECB and Bank of England at 3pm (BST) on Thursday 30th April. (Please register here.)
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