 |
| ECB Likely to Implement 25bps Rate Hike in May, Says UOB Economist |
According to economist Lee Sue Ann at UOB Group, a 25 basis points rate hike by the European Central Bank (ECB) in May looks probable. In the latest ECB gathering, the bank reaffirmed its intention to fight inflation, with a projected headline inflation rate of 5.3% in 2023. The ECB also expects a 1.0% growth rate in GDP for 2023, with an increase to 1.6% in both 2024 and 2025.
Despite the lack of clarity on the ECB's next monetary policy decision in May, UOB Group predicts a rate hike based on the latest indications of the ECB's resolve to address banking woes and ongoing inflation. The banking sector's resilience was highlighted in both the ECB's statement and the press conference with President Christine Lagarde and Vice-President Luis de Guindos. However, UOB Group noted that if banking tensions worsen, the ECB may end the current hiking cycle abruptly.
