Despite the economic slowdown, the European Central Bank is expected to continue raising interest rates in the evening
The European Central Bank will announce later this evening whether it will continue to raise interest rates. Even after nine consecutive rate hikes, price increases are still more than double the 2 percent target, and inflation is not expected to slow to that level for another two years.
Analysts and investors had been leaning toward a pause, but news that the ECB would raise its inflation forecast for next year to more than 3 percent led some traders to believe the move would signal a rate hike.
"Inflation is too strong for the ECB to pause," said Mr Christiansen, an economist at Danske Bank.
Most economists expect the ECB to hold interest rates steady this week, the poll showed, but with a shift in sentiment, markets now see a 63 percent chance of a rate rise, which is expected to be the last in this cycle.
Analysts at UniCredit Bank said: "Even if the ECB does not raise rates, the tone will be hawkish and will try to convince financial markets that rates are likely to rise at a subsequent meeting." We expect today's decision to hold rates steady to mark the end of the tightening cycle."
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