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Frederik Ducrozet reports that the European Central Bank (ECB) has increased interest rates for the first time since September 2023.
According to Ducrozet, inflation projections have been revised upward, though the 2026 core HICP forecast of 2.5% is slightly below expectations. Meanwhile, GDP growth projections for 2026 have been reduced to 0.8%. Ducrozet also highlights that while July may be a live meeting for further action, the ECB is not committing to any policy moves at this stage.
Earlier this year, Frederik Ducrozet reported on weak inflation data and a sharp rise in services inflation that could keep the ECB on alert ahead of policy decisions. Ducrozet has also covered international trends, noting that debates about Bank of England rate cuts have been put aside due to the impact of war on economic priorities. These observations provide context for the ECB’s latest rate hike and updated forecasts.