Traders bet on ECB rate hike as energy costs surge

The European Central Bank shocked many investors by raising rates a half-point last month, saying it would take a 'meeting-by-meeting approach' thereafter

For the first time Wednesday, money markets fully priced in a percentage-point of tightening by the ECB’s October meeting. Picture: Michael Probst.

Traders are betting the European Central Bank and the Bank of England will have to take bolder action to tame surging prices exacerbated by the fallout of Russia’s war in Ukraine.

For the first time Wednesday, money markets fully priced in a percentage-point of tightening by the ECB’s October meeting, according to swaps tied to the decision date. That would take the key rate to 1%, a level last seen more than a decade ago.