Bloomberg and Econostream reported Nov. 5 that European Central Bank (ECB) Governing Council member Ante Žigman sees a December rate increase as possible, as euro-area inflation reached 4.0% in October.
Bloomberg described Žigman’s assessment as a “rather big chance” and framed a December increase as the third since the Iran war began. Econostream separately reported that he saw a strong possibility of a hike and said data available early next month would inform his view. That is one council member’s assessment; the ECB has not announced a December increase.
Eurostat’s flash estimate put annual euro-area inflation at 4.0% in October, up from 3.8% in September. Energy inflation was estimated at 20.8%, compared with 18.9% in September. Services inflation reached 3.3%, up from 3.2%.
The ECB kept rates unchanged at its Oct. 29 meeting: the deposit facility rate remained at 2.50%, the main refinancing rate at 2.65% and the marginal lending rate at 2.90%. The Governing Council said higher energy prices could push inflation up while weighing on growth. It also reported little movement in underlying inflation and no material wage response. Officials say decisions will be made meeting by meeting, based on incoming data, with no preset rate path.
The ECB raised rates by 25 basis points in June and by the same amount in September. October’s hold followed those increases. The Governing Council has not announced another increase.
Eurostat is scheduled to publish full October inflation data on Nov. 18, followed by a flash estimate for November on Dec. 1. Both releases are due before the ECB’s next monetary policy meeting, scheduled for Dec. 16-17. The central bank’s press conference is set for Dec. 17.
