- Swift normalisation of interest rates is an essential first phase
- Must forcefully tackle persistently high inflation
- Inflation will remain high for some time; markets expect peak in Q1 next year
- Sees several upside risks to inflation
This ties with the more aggressive comments from ECB policymakers since Jackson Hole over the weekend. As things stand, a 75 bps rate hike next week appears to be the most likely scenario as they are also doing their best to tee that up.
