European money managers warn ECB rate hikes not yet over

The ECB’s single mandate of price stability makes Europe’s policymakers more likely to hike in the face of rising energy costs

Fears of further Middle East unrest have sent Brent crude up more than 10%. Picture: Carina Johansen/AFP

Some of the biggest money managers in Europe say traders are wrong to bet the European Central Bank (ECB) has finished hiking interest rates.

As a net energy importer, the region is particularly exposed to rising prices if the crisis in the Middle East escalates, and markets are underestimating the possibility of additional tightening in response, according to Legal & General Investment Management, Vanguard Asset Management and Robeco Groep. That leaves short-maturity government bonds particularly vulnerable.