Aberdeen economist Felix Feather says an ECB rate rise this month is "all but
certain," but markets will watch whether the bank’s language frames the move as
a single step or part of an ongoing tightening cycle. Feather expects a hawkish
tone, citing stronger-than-expected eurozone resilience, elevated energy prices,
firmer forward-looking wage indicators and slightly higher market inflation
expectations as reasons policymakers will focus on upside risks. He adds the
war’s economic hit has been smaller than feared, so the ECB may lift growth
forecasts, yet rates could remain around 2.5% for an extended period after
Thursday’s meeting. Core inflation is easing and wage pressure remains
relatively contained, with only scattered signs of second-round effects from the
energy shock; stabilizing energy markets may require US‑Iran de-escalation,
which currently appears unlikely.
