ECB Signals Rate Hikes to Fight Inflation
European Central Bank officials indicate that further interest rate increases may be necessary to combat persistent inflation and prevent a wage price spiral. Investors currently price in a strong chance of a rate hike in December as price pressures remain elevated.
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The European Central Bank may need to raise interest rates further to counter inflation, officials said on Friday, sending EUR/USD into focus as policymakers weighed a December move. The debate follows a unanimous decision on Thursday to leave rates unchanged despite mounting cost pressures. Markets now price a two-in-three chance of a hike before year-end.
