Goldman sees two ECB hikes as energy shock lifts inflation outlook in World Economy News 24/03/2026 Goldman Sachs has updated its euro area outlook, now expecting the European Central Bank (ECB) to deliver two rate hikes as persistent energy-driven inflation pressures offset weaker growth. The move follows higher energy price assumptions amid disruptions in the Middle East. The bank said its commodities team now expects shipping through the Strait of Hormuz “to remain at only 5% of normal levels for 6 weeks,” leading it to “see high energy prices for longer,” with Brent forecast at $80 per barrel in the fourth quarter of 2026, up from $71 previously. Against this backdrop, Goldman downgraded euro area growth by a further 0.3 percentage points, taking year-end growth to 0.7%, while the peak hit to GDP versus pre-war levels rises to 0.7%. At the same time, inflation forecasts were revised higher, with headline inflation now seen peaking at 3.2% in the second quarter and core inflation at 2.5% in Q3, “with slightly more persistence in core inflation given the bigger magnitude of the energy shock,” economists led by Sven Jari Stehn said. “Risks to our new forecast are skewed towards lower growth and higher inflation,” they added. As a result, Goldman now expects the ECB to raise rates by 25 basis points at both its April and June meetings, bringing the deposit rate to a peak of 2.5%. The economists said that policy signals and updated projections point to “a low hurdle for rate hikes,” with recent communication from policymakers turning more hawkish. However, the tightening cycle is expected to be short-lived. Goldman forecasts that rates will begin to decline in 2027 as growth weakens and inflation eases, with the ECB returning policy rates toward a 2% neutral level. “The fiscal response to the energy shock remains an important determinant of how the ECB responds to the energy shock and how long higher policy rates are sustained,” the economists wrote. Goldman also revised its U.K. outlook, lowering growth expectations to 0.6% year-over-year while raising inflation forecasts, with headline inflation seen at 3.2% and core inflation peaking at 2.6%. The bank maintains its baseline for an unchanged Bank Rate, citing tighter financial conditions and a weakening labor market, but flagged this as “a close call” following hawkish Bank of England communication, with risks tilted toward potential rate hikes if energy prices continue to rise. Source: Investing.com 2026-03-24 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share