Economists now expect ECB to skip October, hike in December

Economists now widely expect the European Central Bank to hold steady at its October meeting and deliver a final 25 basis point rate increase in December, pushing the deposit rate to 2.75%, as energy price pressures from the Middle East conflict continue to cloud the inflation outlook.

A Bloomberg survey published Friday found that respondents expect the Governing Council to skip its late October opportunity and act instead at its December 16–17 meeting, which will coincide with updated staff projections on energy and prices. In the previous survey round, analysts had predicted that September's quarter-point hike — which lifted the deposit rate to 2.50% on September 16 — would mark the end of the tightening cycle.bloomberg+2

Analyst Consensus Shifts Toward December

The shift in expectations was driven by a jump in oil and gas prices tied to the prolonged Middle East conflict, with Brent crude fluctuating around $104 per barrel and Dutch TTF natural gas prices elevated above €70 per megawatt-hour. The ECB's own September staff projections placed average headline inflation at 3.0% for 2026, with the target of below 2% not reached until the fourth quarter of 2027.moomoo+1

Rabobank strategists revised their baseline to include a December hike, stating that "our new energy price forecasts make another rate hike more likely than not," while emphasizing "this is not a shift to a stronger policy response". ING also updated its ECB call, now expecting a December move but framing it as an "insurance rate hike" rather than the start of a new tightening campaign. Both banks consider market expectations for at least two additional hikes in 2027 to be excessive.think.ing+2

Temporary Measure, Not a New Cycle

Rabobank views any deposit rate increase above 2.50% as temporary, forecasting that the ECB will likely reverse the December hike in the second half of 2027 as energy-driven inflation fades. The logic rests on the long lags of monetary policy: by March 2027, policymakers would be observing the tail end of the energy inflation pulse rather than the pulse itself.fxstreet+1

At her September 10 press conference, ECB President Christine Lagarde warned that "the conflict in the Middle East continues to generate inflationary pressures" but also noted the eurozone economy demonstrated resilience in the second quarter, with GDP growing 0.6% quarter-on-quarter. Irish policymaker Gabriel Makhlouf told Bloomberg Television on Thursday that "every meeting is a live meeting" during uncertain times.moomoo+1

Economists in Bloomberg's poll expect rates to remain at 2.75% until December 2027, when the ECB would begin lowering them. The October meeting's lack of full staff projections makes it a less natural moment to act, reinforcing the case that any final move will wait until December, when revised energy assumptions can be formally embedded in the outlook.luxtimes+2