Goldman Sachs (NYSE:GS), BNP Paribas (OTC:BNPQY), Uncredited (BIT:CRDI) and RBC Capital Markets had earlier expected the ECB’s terminal rate to peak at 3.75%, following a 25 basis points (bps) hike in July, they said in notes after the central bank meeting. The ECB raised euro zone borrowing costs to their highest level in 22 years on Thursday and said stubbornly high inflation all but guaranteed another move next month and likely beyond that too. “The signal for July was more explicit than it needed to be and therefore reveals significant concern about the inflation outlook. That the signal did not extend to September and beyond is less surprising and does not materially detract from the hawkish signal,” JPM Economist Greg Fuses said. This is the ECB’s eighth straight rate hike since it misjudged the tenaciousness of price rises early last year and took its policy rate to 3.5%, a level not seen since 2001. The ECB also raised its 2023 and 2024 projections for core inflation, excluding volatile energy and food, surprising analysts, with RBC calling the revision to 2024 core inflation as “particularly striking”. Goldman Sachs and Unaccredited said they do not expect any rate cuts until late next year. “A higher terminal rate is also consistent with what we have learnt from other countries, many of which are ahead in the inflation and tightening cycle, where core inflation pressures have turned out to be stickier than expected,” Goldman Sachs said.