European Central Bank

The European Central Bank will announce its monetary policy and interest rates in the European session today, Thursday, where it is estimated that interest rates will be raised by about 50 basis points, to reach 3%.

Inflation rates in the eurozone decreased from their peak levels in October of last year at 10.6%, to record 10% and 9.2% in November and December, respectively, before falling to 8.5% in January at the beginning of the week, while the main index that excluded food and energy prices settled at 5.2%, unchanged from December’s reading.

The European Central Bank began to raise interest rates late, compared to the US Federal Reserve, in July of last year, by raising it by 50 basis points, and raising it by 75 basis points in September and October, and then again by 50 basis points in December.

The statements of European Central Bank President Christine Lagarde and a number of monetary policy makers in the European Central Bank in the previous period support the acceleration of interest rate hikes to slow down inflation and bring it back towards the bank’s target of 2%.

Therefore, investors will focus on Christine Lagarde’s statements at the press conference to read interest rate expectations in the coming period.

Central Bank of England

On the other hand, the Bank of England will announce its monetary policy and interest rates also in the European session today, Thursday, as expectations indicate that the bank will raise interest rates for the tenth time in a row, by 50 basis points, to reach 4%, the highest level in 14 years.

Inflation in the United Kingdom declined from its peak in 41 years at 11.1% in October to reach levels of 10.5% in December compared to 10.7% in the November reading, while the main index excluding food and energy prices rose to 6.3%.

Some expectations showed that 4.5% interest rates will be peak levels, but Bank Governor Andrew Bailey last week refuted these statements and indicated that inflation will be easier than previously thought with the decline in energy prices.

Therefore, attention will be directed towards Bailey’s statements Thursday to monitor the bank’s expectations for interest rates.