ECB Prepares Final Rate Hike in Shortest Tightening Cycle Since 2011

The European Central Bank is set to deliver its final interest rate hike next month in the shortest tightening drive since 2011, according to a Reuters poll.

High energy prices have pushed inflation further away from the bank's 2% target, leading economists to predict that the ECB will raise rates by a quarter point to 2.50% in September.

An 83% majority of respondents in the August 10-13 Reuters poll expected this move, with around 80% forecasting the deposit rate to end this year at 2.50% and 63% saying it would remain there until at least the third quarter of next year.

Economists have reversed their earlier forecasts for inflation, raising median predictions for the final two quarters of this year by 20 basis points to 3.0% and 3.2%, with headline inflation expected to remain sticky at just above 2.5%.