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Barclays: ECB more likely to hike rates by 25 bps rather than 50 bps or no hike
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LONDON (Reuters) – The European Central Bank is more likely to raise interest rates by a modest 25 basis points when it meets on Thursday rather than by 50 bps or make no rate hike, Barclays said on Wednesday.
LONDON (Reuters) – The European Central Bank is more likely to raise interest rates by a modest 25 basis points when it meets on Thursday rather than by 50 bps or make no rate hike, Barclays said on Wednesday.
“At the current juncture, we think that the (ECB) Governing Council is more likely to announce an increase of all policy rates by 25bp, which we see as the highest probability outcome, rather than 50bp or no hike, to which we would ascribe lower but equal probabilities,” Barclays said in the note.
Traders’ bets on a large ECB rate hike this week evaporated quickly on Wednesday as a rout in Credit Suisse shares fanned concern about the health of Europe’s banking sector.
Barclays said it assigned a 20% probability to no hike, a 60% probability to a 25 bps hike and a 20% probability to a 50 bps increase.
(Reporting by Dhara Ranasinghe; Editing by Leslie Adler)
The European Central Bank (ECB) is the central bank for the euro and administers monetary policy within the Eurozone, aiming to maintain price stability.
Basis points are a unit of measurement used in finance to describe the percentage change in value or interest rates, where one basis point equals 0.01%.
Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation.
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