Economists polled by Bloomberg expect the European Central Bank to raise its deposit rate by a quarter point to 2.75% at its last monetary policy meeting of 2026, in December. They expect it to hold the rate there until May 2028. Markets, however, are pricing in several more rate hikes.
Two hikes so far
Borrowing costs were raised twice this year in response to the effects of the war in Iran, in June and September. Inflation has picked up and reached 3.8% last month.
Traders expect three rate hikes over the next year. The ECB’s inflation target is 2%, so the gap from current readings remains wide. Views on how aggressively the bank must act to close it are divided.
A case for waiting
Bas van Geffen, an economist at Rabobank, argued that the ECB does not need to speed up its cycle of hikes. In his view, the bank can wait until December. Investor attention, meanwhile, remains on the steady rise in oil prices.
As of 22:48 GMT on 25 October, the ECB main refinancing rate stood at 2.50%, in force since 23 October, by our market data.
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Data: European Central Bank
