World Economy

ECB Set to Raise Rates in December as Inflation Outlook Darkens

Governing Council member Joachim Nagel indicated the European Central Bank will probably lift interest rates next month as policymakers grow increasingly concerned about price pressures. The move would mark a significant policy shift as central banks across the globe reassess their monetary stances. ECB officials have signaled expectations that euro-area inflation will decline substantially below the 2% target by the end of 2027, though near-term risks remain elevated. The anticipated rate increase comes as European economic growth faces headwinds, with the Bank of France flagging the likelihood of downward revisions to 2026 GDP forecasts following unexpected contraction in the third quarter. Sweden's central bank is also preparing to tighten policy this week, joining the broader tightening push among regional policymakers.