Bundesbank's Nagel Backs December ECB Rate Hike as Inflation Outpaces Forecasts

European Central Bank Governing Council member and Bundesbank President Joachim Nagel indicated that a December interest rate hike is very likely necessary due to persistent price pressures. The ECB previously held its key deposit rate at 2.5% in October, but inflation is forecast to exceed 4% in coming months, more than double its 2% target. Speaking in Berlin, Nagel warned that inflation is surpassing September projections and pushing the euro area closer to an adverse scenario. Markets are pricing two to three rate hikes over the next year as policymakers aim to prevent energy costs from sparking broader inflation.