Reuters poll: 83% of economists expect ECB rate hike in September

The European Central Bank is on course to raise interest rates by a quarter point next month, completing what would be its shortest tightening cycle since 2011, as elevated energy prices from the prolonged U.S.-Iran conflict keep inflation well above target.

Poll Points to Strong Consensus

An 83% majority of economists surveyed in a Reuters poll published Thursday expect the ECB to lift its deposit rate to 2.50% at the September meeting, up from 72% before the July decision and roughly 65% in June. The central bank hiked once in June but held steady last month while signaling another increase was forthcoming.reuters

"The longer oil prices stay at these levels, the higher they go, the greater the risk we see second-round effects developing," said George Buckley, chief European economist at Nomura ↗ 2.12%. "If they go once they're probably going to go again… Given how obvious a rate hike looked to the ECB Governing Council in June it makes me think another one is highly likely."reuters

Around 80% of respondents expect the deposit rate to end 2026 at 2.50%, with 63% forecasting it will remain there until at least the third quarter of 2027.reuters

Inflation Driven by Energy Shock

The what-was-expected-to-be-brief U.S.-Iran conflict has now entered its sixth month, keeping oil prices roughly 25% above pre-war levels and pushing eurozone inflation to 2.9% in July. German harmonised consumer prices accelerated to 2.8% year-over-year in July, with energy inflation surging to 7.3% from 2.7% in June.tradingpedia+1

Median forecasts for eurozone inflation in the final two quarters of 2026 were revised upward by 20 basis points to 3.0% and 3.2%, respectively. Inflation is not expected to return to the ECB's 2% target until the third quarter of 2027.reuters

"Headline inflation will remain sticky at just above 2.5%. This is what backs our forecast for another rate hike," said Melanie Debono, senior Europe economist at Pantheon Macroeconomics. "The risk to our forecast for one more rate hike is towards further interest rate increases."reuters

Policy Divergence With the Fed Supports Euro

The ECB's hawkish trajectory contrasts with the U.S. Federal Reserve, which held rates steady at its July meeting amid signs of cooling American inflation. U.S. headline CPI eased to 3.4% in July from 3.5%, and core inflation slipped to 2.5%. Markets have largely discounted a September Fed hike, widening the transatlantic policy gap.interactivecrypto

The EUR/USD pair edged higher this week, while the euro also gained against the Canadian dollar as investors priced in the divergence. If realized, the ECB's two-hike cycle would mirror its 2011 episode — when the bank raised rates twice in response to an energy shock, a sequence many economists now regard as a policy mistake.fxstreet+1

The eurozone economy, meanwhile, expanded 0.4% in the second quarter, its strongest pace since early 2025, prompting economists to raise their full-year 2026 growth forecast to 0.8% from 0.5% — the first upgrade in seven months.reuters