(Finance) – As expected, the European Central Bank has opted for a rate hike of 75 basis points, driven by ever-growing inflationary fears and supported by an economy that seems sufficiently resilient for the moment.
Inflation in the Eurozone, in fact, continues to remain worrying (above expectations at 9.1% in August), especially after the Russian decision to cut gas supply, while the latest data on September GDP show a surprisingly aggregate annual growth. positive at 4.1%.
All in all – underlines Giorgio Broggi, Quantitative Analyst at Moneyfarm – despite the fears of recession continue to increase, with the probability of recession in the next 12 months now at 50% (source: Bloomberg), the ECB has strongly reaffirmed its will to fight inflation at any costto avoid major damage in the medium to long term.
The markets reacted moderately to the publication of the decisions, showing how much expectations were already substantially priced both by the risky asset markets and on the monetary and currency side. Even the spreads between central and peripheral countries did not show nervousness, signaling that the risk of “fragmentation” remains manageable for the moment.
For Ben Laidler, eToro’s global markets strategist, “la BCE is stuck between a rock and a hard placewith high energy-led inflation and a likely recession by the end of the year. “The bank reflected this in its significantly revised economic forecast, raising 2023 inflation to 5.5% and reducing growth of GDP to 0.9% The collapse of the euro has taken comfort from the greater aggressiveness of the ECB, regaining parity with the dollar for now.
Eurotower also warned that in the event of a “negative scenario”, with a protracted war in Ukrainepersistent geopolitical tensions and above all one complete interruption of gas supplies from Russiathe euro area economy next year will accuse one recession 0.9%.
Today the price of gas closed up in Amsterdam by about 3% at 220.54 euros per megawatt hour, recovering from the thud that had pushed it to a low of 192.92 euros in the morning. The EU’s rush to set a ceiling on the price of Russian gas has pushed the prices. In this regard, according to European diplomatic sources, the proposal to introduce a ceiling on the price of gas from the Russian pipeline will not be discussed tomorrow by the European energy ministers. The European heads of state and government will meet on 6 and 7 October in Prague for an informal summit and then again on 20 and 21 October in Brussels. It now remains to be defined in which of these meetings the issue of the gas price cap will be addressed.