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ECB: Inflation shock risks rate hikes – BNP Paribas
BNP Paribas notes that earlier disinflation allowed the European Central Bank to cut rates and support a growth rebound in 2025, but the Iran conflict could reverse this. Under moderate scenarios, the ECB may stay cautious without hiking. In an escalation scenario with inflation near 4% by year-end, the bank expects the ECB would likely need to raise key interest rates. [...]