Key facts
- ECB board member Isabel Schnabel stated further rate hikes are needed to tame inflation.
- Schnabel cited high energy prices as a reason for continued vigilance.
- Future ECB measures depend on economic and inflation trends.
- BofA Global Research withdrew its forecast for Bank of England rate hikes.
- BofA Global Research cited easing inflation and a softer economic outlook for its forecast change.
- BofA Global Research expects Bank of England rates to remain steady.
- BofA Global Research anticipates a 25-basis-point cut by the Bank of England in November 2027.
- Spanish industrial prices increased by 10.5% year-on-year in May.
- The surge in Spanish industrial prices was driven by a 28.2% rise in energy prices.
- Spanish energy price increases affected electricity generation, transmission, and distribution.
European Central Bank board member Isabel Schnabel has indicated that additional interest rate increases are required to bring inflation back to the central bank's 2% target. Schnabel highlighted the ongoing impact of high energy prices and stressed the importance of maintaining vigilance. She stated that any future monetary policy decisions would be guided by evolving economic conditions and inflation data.
In a contrasting development, BofA Global Research has rescinded its earlier projection that the Bank of England would implement further interest rate hikes this year. The firm attributes this change to observed easing inflation pressures and a less robust economic forecast. BofA Global Research now anticipates that interest rates will remain unchanged, with a solitary 25-basis-point reduction expected in November 2027.
Separately, Spain's industrial sector witnessed a substantial price increase in May. Industrial prices rose by 10.5% year-on-year, marking the most significant jump in over eighteen months. This surge is predominantly linked to a sharp 28.2% increase in energy prices, specifically impacting the generation, transmission, and distribution of electricity.