ECB set for last rate hike in December, but inflation risks keep door open for one more
TLT•All 71 economists polled expect the ECB to raise its deposit rate to 2.75% in December. While 65% expect that to be the peak, 25 economists see another increase, most likely in the first quarter of 2027.
1. December hike expected
All 71 economists polled November 10-12 expect the ECB to raise its deposit rate to 2.75% in December, following moves in June and September. That would put the rate above the ECB’s estimated neutral range of 1.75%-2.50%.
2. Some see another increase
A 65% majority of economists expect the rate to peak at 2.75% in December, while 25 expect another increase, most likely in the first quarter of 2027. Markets are pricing in two to three hikes by the end of next year.
3. Inflation forecasts rise
Economists forecast inflation averaging 3.1% this year and 2.8% next year, up from 3.0% and 2.6% in the previous survey. Core inflation is forecast to average 2.6% this quarter and 2.8% next, while growth is projected at 1.1% this year and 1.3% next year.
