ECB Rate Hikes Likely: 91% Chance of 25 Basis Points Increase

The European Central Bank (ECB) faces pressure to raise interest rates as market expectations predict a 91% chance of a 25 basis point hike at the next meeting on June 11, bringing the key deposit facility rate to 2.25%. Inflation in the euro area reached 3% as of April. ECB policymakers emphasize a data-dependent approach, balancing inflation control with economic stability. Market analysts indicate tightening lending standards may already impact corporate financing, complicating the ECB's decision-making process ahead of anticipated rate changes later in the year.