The European Central Bank is expected to leave its deposit facility rate unchanged at 2.5% when it meets this week, but the debate has already moved on to December. Konstantin Veit, Portfolio Manager at PIMCO, and Martin Wolburg, Senior Economist at Generali AM (part of Generali Investments), both see the next hike arriving before year-end, as energy prices push euro area inflation back above target. For PIMCO, this week's meeting should be a straightforward hold. Veit expects the Governing Council to keep rates where they were set in September, when the ECB raised them by 25 basis points, and to do so without dissent. We believe that, at its October meeting, the European Central Bank will keep the deposit facility rate unchanged at 2.
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