The European Central Bank is expected to incur a series of interest rate hikes and sacrifice growth in the region due to the rising cost of living, which is still threatened to rise further.
With eurozone inflation expected to rise to at least 10% in the coming months and the risk of consumer prices rising, a 75 basis point rate hike, on Thursday, is certainly a possibility.
Since big hikes can have a greater impact on inflation expectations than a more gradual approach, a move of 75 basis points may make sense, ECB Observer and Chief Economist at Berenberg, Holger Schmieding, said in a research note.
He added: Although its price is high, it can still exacerbate pressures in the bond markets, according to CNBC and seen by Al Arabiya.net.
The recent halt to gas deliveries to Europe via the Nord Stream 1 pipeline has not only sent stocks lower and increased the risk of a European recession, but has also pushed Italian 10-year government bond yields to 4% - the highest level since mid-June.
Eurozone inflation reached 9.7% in August, and with continued pressure on energy prices, it is expected to reach double digits in the coming months.
For his part, chief economist at Deutsche Bank, Mark Wall, raised his final interest rate forecast by 50 basis points to 2.5 percent.
