(Bloomberg) -- Traders are confronting the prospect of even bigger rate increases from the European Central Bank, as pressure grows on officials to intensify their fight against record inflation in the region.

Money markets priced in 125 basis points of tightening by October, according to interest-rate derivatives linked to ECB meeting dates. That implies a half-point hike and a three-quarter point increase spread over its next two policy decisions. The ECB’s deposit rate is seen by markets as hitting 2.25% next year, the highest since 2008. 

The repricing shows how investors are increasingly willing to price in jumbo-sized increases early in the ECB’s rate-hike cycle. A growing minority of policy makers have expressed their willingness to follow the Federal Reserve’s aggressive stance and raise rates by 75 basis points. The ECB already abandoned guidance it would only hike by a quarter point in July, instead lifting rates by a half point. 

The latest leg higher in pricing came after euro-area inflation data accelerated to another all-time high. ECB Governing Council member Joachim Nagel urged a “strong” reaction to Wednesday’s figures when policy makers meet next week. Money markets are currently pricing around 67 basis points of tightening in that policy decision, implying a three-quarter point hike is seen as being more likely than not. 

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