VIEW: Berenberg Also Cognisant Of Hawkish Risks To Baseline Call

Berenberg note that “following Schnabel’s comment and the subsequent suggestion by ECB council member Martins Kazakhs from the Latvian central bank that the ECB should “be open to discussing both 50 and 75 basis points as possible moves”, ECB Chief Economist Philip Lane argued yesterday for a “steady pace” of rate hikes in a “multi-step calibrated series rather than a smaller number of larger rate increases”. In line with Lane’s comment, we continue to expect a 50bp increase on 8 September that would take the main refi rate from 0.5% to 1.0%. However, the risks to our call for a 50bp move on 8 September, followed by two 25bp hikes in October and December, are tilted to the upside.”