Economists See Final ECB Hike Next Week in Split With Markets

The European Central Bank is on track to deliver what most economists expect will be its final rate hike this cycle, even as financial markets price additional tightening well into next year.

According to a Bloomberg survey reported by Businesstimes, an overwhelming majority of economists predict the ECB will raise its deposit rate by 25 basis points to 2.5% on Thursday and hold it there through at least 2027. Traders, by contrast, are pricing roughly three more quarter-point increases by the middle of next year, reflecting a far more hawkish outlook.

The gap between the survey's consensus and market pricing underscores the ECB’s challenge as it calibrates policy against a backdrop of resurgent energy costs. Oil prices are heading back toward US$100 a barrel, while natural gas has surged to levels not seen since 2023. The Strait of Hormuz “has become the swing factor for the ECB’s future decisions,” according to Dennis Shen, a lecturer at TU Berlin’s International School of Management, who was quoted in the Bloomberg survey. “A prolonged disruption would turn an energy-price shock into a broader inflation problem,” he said. “The ECB can look through a temporary energy shock; it cannot afford to look through a persistent one.”

The survey was conducted before the ECB's policy meeting scheduled for Thursday, Sept. 10, 2026. It points to a central bank that is preparing to deliver a hike but likely to stop short of signalling further moves.

“The ECB is likely to present a 25 basis-point hike as a necessary step,” said Ken Egan, director at Kroll Bond Rating Agency Europe, in the survey. “But it’ll probably stop short of guiding markets toward another hike, keeping the focus on data dependence, anchored inflation expectations, still-contained wage growth and the need to judge how strongly past tightening is feeding through.”

Almost no survey respondents found evidence that businesses or consumers are bracing for stronger price pressures ahead, and the majority expressed only mild concern about knock-on effects on wages. Policymakers themselves largely agree that inflation at a three-year high has not shifted medium- or long-term expectations or affected workers’ pay. But that could change, according to officials.

Executive Board member Isabel Schnabel told Bloomberg it is “critical” to prevent second-round effects early, before they demand a more forceful response. Austrian Governing Council member Martin Kocher said in a separate interview that it will become “much clearer” in coming months if any such effects have materialised.

Some of their peers have already signalled willingness to go further. Lithuania’s Gediminas Simkus said a hike next week “isn’t going to be enough,” according to the survey. Bulgaria’s Dimitar Radev referred to both September and December as “live” meetings where borrowing costs could be lifted.

Yet the survey’s median view is that the deposit rate will peak at 2.5% this week. More than three-quarters of respondents said that level would be “somewhat above neutral,” meaning it is already restrictive enough to cool the economy.

The euro zone economy has so far proved resilient. Output expanded more than expected in the second quarter, and business surveys point to solid momentum ahead. The survey shows economists anticipate an upward revision to the ECB’s 2026 growth projection, while the medium-term outlook for both growth and inflation is expected to be confirmed.

Economists at DWS International expressed caution. “The ECB is unlikely to signal any further interest-rate increases in the coming months,” said Ulrike Kastens, senior economist at DWS, as reported in the survey. “However, we believe that the risks surrounding the next policy move remain skewed to the upside, with a rate hike appearing more likely than a rate cut.”

The hawkish tilt in markets stems largely from geopolitical risk. The US and Iran are back to fighting over control of the Strait of Hormuz, threatening to extend a half-year conflict. A sustained disruption could transform an energy-price spike into a deeper inflation problem, one the ECB would find harder to ignore.

A separate Reuters poll, summarized by Investing.com, also indicated economists expect the ECB to raise rates a second time in September but then stop, though it provided no further detail.

The survey results highlight a central bank trying to balance the need to contain inflation against risks of overtightening in an uncertain environment. For now, economists see Thursday’s move as the peak of the tightening cycle, even as energy markets keep the door open for more.