ECB Set for Final Rate Hike in Tightest Cycle Since 2011

The European Central Bank (ECB) is expected to raise interest rates one more time next month, according to a Reuters poll. The decision comes as high energy prices continue to push inflation further away from the bank's 2% target.

An 83% majority of respondents in the August 10-13 Reuters poll predicted that the ECB would increase its deposit rate by a quarter point to 2.50% in September. This would be the shortest tightening cycle since 2011, when the ECB raised rates twice in response to an energy-price shock.

Economists also expect the deposit rate to remain at 2.50% through at least the middle of 2027. Inflation was not expected to return to the ECB's 2% target until the third quarter of 2027, with core price pressures seen strengthening over the coming few quarters.