Reuters Poll: ECB Expected to Raise Rates Again to 2.50% in September
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A Reuters poll shows 83% of economists expect the ECB to raise its deposit rate by 25 bps to 2.50% in September, driven by elevated oil prices pushing inflation to 2.9% — with rates likely on hold through mid-2027.
How certain is the market about this hike?
Reuters polled 69 economists from Aug 10–13: 57 (83%) expect a September hike, up from 72% before the July meeting and roughly 65% in June — consensus is converging fast.
About 80% see rates staying at 2.50% through year-end; 63% expect that level to hold at least through Q3 next year.
This means → the market is not just betting on "one more hike" but on "hike and hold" — a rate plateau that could last over a year.
Why is another hike unavoidable? Oil is the key driver
The US-Iran conflict has persisted for roughly six months, keeping oil prices about 25% above pre-conflict levels and pushing eurozone inflation last month to 2.9% — well above the ECB's 2% target.
Economists raised their median inflation forecasts for the final two quarters of this year by 20 bps each, to 3.0% and 3.2%. Inflation is not expected to fall back to target until Q3 2027.
In plain terms = as long as oil prices stay elevated, price pressures will not fade — and the central bank has no choice but to keep the brakes on.
"Second-round effects" — what does the ECB fear most?
George Buckley, Nomura's chief European economist, noted: "The longer oil stays high, the greater the risk of second-round effects" — the spiral where higher oil drives up wages, which in turn pushes prices higher still.
Melanie Debono, senior European economist at Pantheon Macroeconomics, added that second-round risks are higher in core goods than in services, supporting one more hike — but with risks tilted toward further tightening.
This means → the base case is "one more hike, then stop," but if oil keeps climbing, 2.50% may not be the ceiling.
Will history repeat? The cautionary tale of 2011
The ECB has never stopped tightening after a single hike — Buckley argued that one hike alone looks more like fine-tuning than genuine tightening.
The ECB hiked once in June, paused in July while signaling more to come. If September delivers, this will be the shortest tightening cycle since 2011.
This reflects an uncomfortable parallel: in 2011 the ECB also hiked twice in response to an energy shock — a move now widely regarded as a policy mistake that worsened the eurozone debt crisis.
The economy isn't in recession — and that actually strengthens the case for hiking
Eurozone GDP grew 0.4% quarter-on-quarter last quarter, beating expectations; growth of 0.2% and 0.3% is forecast for the current and next quarters.
The full-year 2026 growth forecast was raised from 0.5% to 0.8%, the first upgrade in seven months.
In plain terms = the economy can still take it + prices are still rising = the ECB has both the justification and the room to keep hiking. If the economy were already contracting, resistance to further tightening would be far greater.
Content is for reference only, not financial advice.