ECB rate hike cycle: how will they start?

Despite guidance for a ‘gentle’ start to rate hikes, could economic conditions convince the European Central Bank to tighten monetary policy more aggressively?

Fixed income 15 Jul 2022 3 min read

Lionel Oster

Portfolio Manager - Fixed Income

Key highlights

Inflation in Europe had started to rise before Russia’s commodity shock.
The current weakness of the euro has been another factor that has been driving inflation higher.
ECB President Lagarde used the word ‘flexibility’ twelve times at their June conference, adding that the Council was prepared to use the flexibility given by their mandate on inflation.
The political landscape in Europe is likely to be supportive of the ECB taking action to tackle the rising inflation.

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About the author

Lionel Oster
Portfolio Manager - Fixed Income
Lionel Oster is a Portfolio Manager in the Fixed Income team. He contributes to the management of a range of Currency and Global Sovereign strategies.
Lionel joined UBS Asset Management in 2006. Prior to this he worked at F&C Asset Management for 10 years, most recently as head of the European government bond team.
Lionel is a Regular Member of the UKSIP.