ECB Predicts Final Interest Rate Hike This Month

A Reuters poll suggests that the European Central Bank (ECB) will raise interest rates for a second time in September, but then stop hiking. The move would be part of what would be the ECB's shortest rate-hiking campaign since 2011.

Most economists polled by Reuters believe energy price rises are not likely to trigger broad inflation pressures. They expect the ECB to raise its deposit rate by a quarter-point to 2.50% next week, up from last month's 83% prediction and 72% before the July policy meeting.

Economists predict that the deposit rate will end this year at 2.50%, with 91% of respondents agreeing on this forecast. They also see it staying there through the middle of next year, with 78% predicting this outcome.

However, some economists are cautious about the ECB's policy stance, citing concerns that inflation may not approach target during the course of next year. If the war in Iran drags on or intensifies, consumer inflation expectations could move up again, and there is a risk of wage slippage.