ECB Likely to Respond to Higher Inflation Despite Weak Growth Outlook

The ECB is expected to hike rates in June and July despite a sharp contraction in Eurozone private sector activity, as inflation pressures and supply chain disruptions remain elevated.

Key Takeaways

• 1.Eurozone private sector activity is contracting, with the composite PMI falling to 47.5 in May, driven by declines in Germany and France.
• 2.Inflationary pressures remain high, with input costs rising at the fastest pace in three-and-a-half years.
• 3.The ECB is expected to prioritize fighting inflation over growth concerns, with rate hikes anticipated in June and July.

Table of Contents

• ECB likely to respond to higher inflation, despite weak growth outlook
• Global asset class preferences definitions
• Appendix
• Risk information
• Generic investment research – Risk information

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