Traders are betting the European Central Bank and the Bank of England will have to take bolder action to tame surging prices exacerbated by the fallout of Russia’s war in Ukraine. Accelerating inflationConcerns that Russia will continue to retaliate against Western sanctions by putting pressure on European natural gas supplies have pushed up energy prices in Europe. “It is all about energy prices,” said Peter Chatwell, head of global macro strategies trading at Mizuho International Plc, adding that higher import bills are weighing on the euro and sterling, which in turn increases inflation. Traders have been left in the dark on the future path of ECB rate hikes since it broke with its tradition of giving forward guidance. For the BOE, money market pricing implies that the central bank will raise rates by more than 50 basis points at one of the next three decisions.

Source: Irish Examiner August 25, 2022 08:05 UTC