In a report published on Monday, economist Sven Jari Stehn at Goldman Sachs noted that the European Central Bank (ECB) is seen lifting the key interest rate by 25 basis points (bps) in July.

Key quotes

“The ECB will boost its key rate another four times in 2023 to lift it to 1.25%.”

“Given continued cost-push pressures and limited evidence of a sustained demand hit, recent ECB commentary has emphasized rising concerns.”

“While a sharper slowdown in growth or renewed sovereign stresses could lead to a slower policy normalization, clearer signs of second-round effects could require a faster exit.”

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