Morgan Stanley raises ECB's terminal rate forecast to 4pc
Business
Forecast sees a 0.25pc increase due to persistent inflation
NEW YORK (Reuters) – Morgan Stanley on Monday raised its forecast for the European Central Bank's (ECB) terminal rate to 4 per cent after June inflation data for the euro zone showed only the smallest drop in underlying inflation.
The bank previously expected ECB's main interest rate would peak at 3.75pc, following an expected 25 basis points hike in July.
"After updating our inflation forecast with the June data, and taking stock of recent commentary from policymakers at this week's ECB Forum on Central Banking in Sintra, we change our ECB call and now see a terminal rate of 4pc," Morgan Stanley said.
