Economists Forecast Another ECB Rate Hike in September

According to recent polls, a majority of economists predict the European Central Bank (ECB) will carry out another monetary adjustment at its next meeting in September. The survey suggests that 83% of participants anticipate an increase in the deposit facility rate by 25 basis points to 2.50%. This projection represents a growing trend compared to expectations last month and June, when figures were 72% and 65%, respectively. However, most economists still expect the ECB to keep interest rates stable until year-end, with some predicting no further changes before mid-2027. This aligns with the current stance of the ECB, which considers rates near a neutral zone between 1.75% and 2.25%. Even with another adjustment, these rates will remain within a marginally restrictive area. However, this level of rate is not sufficient to combat potential secondary effects of inflation, meaning that policymakers are cautiously monitoring economic developments. Projections indicate that as oil prices stabilize at current levels, there is an increasing risk of secondary effects developing. Nomura highlights that the ECB can act more proactively and effectively in response to these risks. This is particularly critical given the risk of repeating past errors, such as the mistaken belief in transitory inflation from 2021-2022.