MILAN, June 1 Reuters Deutsche Bank economists have ramped up expectations over European Central Bank policy tightening and now expect one of the two interest rate hikes in the third quarter to be a 50 basis points hike, more likely in September than July.

A 50bp hike is not inconsistent with the reaction function presented in President Lagardes policy normalisation blog… We believe the ECB is continuing to underestimate inflation and we expect support for a 50bp hike will increase as the summer progresses, they wrote in a note late on Tuesday.

Deutsche Bank39;s previous baseline scenario was to expect backtoback 25 basis points hikes from July.

Reporting by Danilo Masoni

Source Reuters