Fitch Ratings said on Tuesday that the European Central Bank (ECB) is more likely to hike interest rates as a result of "inflationary pressures from the war in Ukraine."
The rating agency stressed that energy and food prices are set to remain "elevated for the coming quarters at least" and that potential sanctions on Russian oil, could cause a further surge in commodity prices. Fitch noted it expects the ECB to raise rates twice by 25 basis points before the end of the year and bring the main refinancing operations and deposit rates to 0.5% and 0%, respectively.
Earlier, Citibank stated it sees the ECB raising rates by 25 basis points in July and then by another 25 basis points in September.
