March 2 (Reuters) - JPMorgan raised its forecast for
where it believes European Central Bank interest rates will peak
for a second time in a week on Thursday, after euro zone data on
labour and inflation suggested monetary policy will have to
tighten further.
JPMorgan now sees the ECB's "terminal rate" reaching 3.75%
by June this year, from an upwardly revised forecast 3.50% last
week.
Data on Thursday showed core consumer price pressures in the
currency bloc accelerated more than expected in February, while
the unemployment rate held at all-time low.
"This morning's reports showed euro area unemployment
holding at 6.7%, which is effectively at its record low, and
Euro area core inflation accelerating further," the bank's
economists, led by Greg Fuzesi, said.
"Overall, the labour market remains strong, consistent with
the strong employment readings in the business surveys. And,
that clearly creates inflationary pressures," they said.
The bank said it expects the central bank to raise interest
rates by half a percentage point at its May meeting, rather than
a quarter point.
(Reporting by Amanda Cooper; Editing by Danilo Masoni)
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