Goldman Sachs expects ECB rate increase by another 50 bps.

Goldman Sachs has revised its forecast of interest rate increase by the European Central Bank - now it believes that by June it will be increased to 3.75% instead of 3.5%, predicted earlier. According to the bank, the regulator will raise it by 50 basis points in May, writes investing.com, citing Reuters.

Revise the forecast bank prompted by rising inflation in France and Spain. In addition, ECB chief economist Philip Lane made a statement that the regulator is no longer considering raising the rate by 25 basis points as a baseline, though he does not rule out that in May it might be raised by this amount. According to Lane, the regulator does not intend to stop raising the rate yet and is likely to keep it at its peak until Q4 next year.

The European Central Bank had previously announced its intention to raise the rate by 50 percentage points in March, thereby expecting to trigger enough demand reduction to bring inflation below 8%. It has already raised the rate by 3 percentage points since July 2022.