Goldman Sachs (in brief)

• We expect the Governing Council to hike policy rates by 25 bps and provide additional details of its sovereign backstop.
• Although the sharp depreciation of the euro, recent central bank actions abroad and the chance of a further rise in survey inflation expectations suggest that a 50 bps move is possible, we believe that a quarter-point increase remains likely.
• This is because the Council has strongly guided towards 25 bps, the growth outlook has weakened and the ECB has historically not delivered hikes that were less than 70% discounted.