Reuters poll: All 65 economists expect ECB rate hike next week

The European Central Bank is all but certain to raise its deposit rate by a quarter percentage point to 2.50% when policymakers meet on September 10, a move that would cap what economists expect to be the shortest rate-hiking campaign in 15 years.

All 65 economists surveyed in a Reuters poll published on Thursday predicted the increase, up from 83% in an August poll, making the decision one of the most widely telegraphed in recent ECB history. The hike would follow a June quarter-point rise to 2.25% — the ECB's first rate increase in three years — bringing total tightening this cycle to just 50 basis points.reuters+1

A "Clear Cut" Decision

Central Bank of Ireland governor Gabriel Makhlouf, speaking ahead of next week's meeting, left little room for doubt. "The decision we're going to make next week will not be a surprise to anybody," he told the Financial Times, adding that better-than-expected GDP growth was "one of the factors that is making next week's decision really clear cut". He noted, however, that even at 2.50%, the deposit rate would not yet be restrictive, placing that threshold at roughly 2.75%.irishtimes

Eurozone inflation accelerated to 3.3% in August from 2.9% in July, driven largely by a 14% surge in energy prices linked to the war in Iran and disruptions to global energy supplies. ECB economists have attributed around 90% of the increase in energy inflation between January and May to adverse supply factors.global.chinadaily+2

After September, a Pause

Despite the consensus around next week's hike, most economists do not expect the ECB to tighten further. About 91% of those polled by Reuters predict the deposit rate will end the year at 2.50%, and 78% see it staying there through mid-2027.reuters

"We still find it hard to see, amid public finance woes and surging bond yields, that the ECB would really be willing to add more fuel to the fire," said Carsten Brzeski, global head of macro at ING ↗ 0.24%, who characterized the move as an "insurance rate hike" to bolster ECB credibility and preempt second-round inflation effects. TD Securities struck a similar tone, expecting no meaningful forward guidance beyond the ECB's standard data-dependent, meeting-by-meeting language.fxstreet+2

Risks Remain Tilted to Upside

If the forecast holds, this would be the ECB's shortest hiking campaign since 2011, when it raised rates twice in response to rising oil prices — a move many policymakers now view as a policy mistake. The parallel has not gone unnoticed, though analysts see key differences this time.reuters

Inflation is not expected to return to the ECB's 2% target until late 2027, and risks remain skewed to the upside. Natural gas prices are running roughly 30% above the ECB's June projections, even as oil prices sit about 15% lower. The war in Iran, the fluid situation in the Middle East, and the risk of further energy supply disruptions could yet force policymakers to reconsider.fxstreet+1

"If inflation starts moving in the wrong direction, then we're going to have to move in that direction," Makhlouf warned.irishtimes