ECB Expected to Hike Rates for Final Time in September

The European Central Bank (ECB) is expected to raise interest rates for the second and final time in September, according to a Reuters poll of economists. The poll predicts that the ECB will lift its deposit rate by a quarter-point to 2.50% next week.

This would mark the ECB's shortest hiking campaign in 15 years, with many policymakers now regarding its previous hikes as a policy mistake. Most economists surveyed believe energy price rises are not likely to trigger broad inflation pressures, and that the ECB will be disinclined to add further pressure on a fragile economy.

Carsten Brzeski, global head of macro at ING, expects a September quarter-point rise but no more after that. He said: '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.'

Euro zone inflation accelerated to 3.3% in August, driven largely by energy costs. However, economists aren't convinced the ECB will need to move again, with about 91% predicting the deposit rate will end this year at 2.50%, and 78% seeing it staying there through the middle of next year.