Earned $158,000 by predicting central bank decisions, does the account believe there is still room for rate hikes in the UK and Europe?

According to monitoring by PolyBeats, the Middle East energy shock has reignited inflation in the UK and the eurozone, prompting a Polymarket account with only 15 trades—all focused on central bank interest rates—to add to its positions again. As of October 10, aghy had invested a combined $48.2k in the "ECB October 25 basis point rate hike" and "Bank of England November 25 basis point rate hike" markets, with a potential maximum return of $113.7k.

The account had previously bet on the Federal Reserve raising rates by 25 basis points in July, ultimately losing -$58.68k. In September, the account again took a heavy position on a 25 basis point Fed rate hike and realized a profit of +$222.88k. The account's current set of positions can be interpreted as: a Bank of England November rate hike is already close to the base case, while it is still betting against the trend that the ECB will raise rates for a second consecutive time in October after its September hike.

The European Central Bank already raised rates by 25 basis points on September 10, lifting the deposit facility rate to 2.50%. The ECB said at the time that the Middle East conflict continued to create inflationary pressure, but also stressed that it would not pre-commit to a future path and would still make decisions meeting by meeting based on data.

On October 2, Eurostat published the preliminary September HICP reading for the eurozone, showing year-on-year inflation rose to 3.8% from 3.2% in August; energy inflation rose to 18.8% from 14.3%, while core inflation excluding energy, food, alcohol, and tobacco was 2.5%. This set of data increased the case for continued policy tightening, but also showed that this round of inflation rebound was mainly driven by energy, rather than all price categories spiraling out of control at once.

The eurozone's full September HICP will be released on October 16, the ECB will make its rate decision on October 29, and the Bank of England's next meeting will be on November 5.