ECB Seen Raising Rates Again, But Then Done

The European Central Bank (ECB) is expected to raise interest rates for the second and final time on September 10, according to a Reuters poll. The rate hike will bring the deposit rate to 2.50%, up from 1.75% currently.

Most economists in the survey believe that energy price rises are not likely to trigger broad inflation pressures. While war in the Middle East has heated up again and global bond yields have risen sharply, forecasters expect the ECB to be disinclined to add further pressure on a fragile economy.

'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,' said Carsten Brzeski, global head of macro at ING.