ECB expected to hike rates by half point despite sharp fall in headline inflation

A half-point interest rate rise on Thursday will add €70 a month to the cost of a tracker mortgage loan of €300,000

ECB president Christine Lagarde warned in December that there’s “good reason to believe” inflation numbers in the first two months of 2023 could be higher.

A bigger-than-expected fall in the headline inflation rate across the eurozone will do little to dissuade the European Central Bank from hiking interest rates tomorrow, economists have said. 

Markets are expecting the ECB to press ahead with a half-point increase at its first meeting this year, on Thursday, despite eurozone-wide inflation falling in January to 8.5% from 9.2% in December.