ECB to hike rates again in December as inflation almost doubles 2% target
TLT•The ECB is expected to hold its deposit rate at 2.50% this month and raise it by 25 basis points in December, a poll of economists found. Inflation was 3.8% in September, close to the ECB’s worst-case scenario.
1. December hike expected
All but three of 73 economists polled expected the ECB to hold its 2.50% deposit rate on October 29. A near-90% majority, 64 of 73, expect a 25-basis-point increase in December, reversing last month’s survey, when more than 90% expected rates to remain on hold.
2. Inflation and growth outlook
Economists expect inflation to average 3.0% this year and 2.6% next year, up from previous forecasts of 2.9% and 2.3%. The euro zone economy is expected to grow 1.0% this year, compared with 0.8% in the previous survey, followed by growth of 1.2% in 2027 and 1.3% in 2028.
3. Rate peak forecasts
A majority of economists, 40 of 70, expect the deposit rate to peak at 2.75%, while 24 expect it to reach 3.00%. The September ECB meeting accounts showed policymakers agreed inflation risks were tilted to the upside.
