Strong Israel GDP and inflation data seen prompting 75 bps rate hike | Reuters
A sharp rebound in Israel's economic activity and a jump in annual inflation have made a 0.75-point interest rate increase more likely next week, analysts said on Tuesday.
The central bank had looked headed for a second straight half-point move at its upcoming Aug. 22 policy meeting, but data showed stronger than expected economic growth in the second quarter a day after a further uptick in prices.
"Economic activity remains strong and alongside the red-hot inflation figures for July, the risks are skewed to a 75 basis point rate hike," said Liam Peach, emerging markets economist at Capital Economics.
GDP grew an annualised 6.8% in the second quarter from the first quarter, versus an expected 2.8% in a Reuters poll and after a revised downward contraction of 2.7% in the prior three months.
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