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Why Economists Expected the ECB to Hike to 2.50%—Then Stop
All 65 economists in Reuters’ September 3 poll expected a 25 basis point ECB deposit rate increase to 2.50% on September 10, but most saw it as the final hike: inflation had reached 3.3%, yet the jump was largely ener... The forecast was for restrictive policy to last through at least mid 2027, rather than for rates...
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- All 65 economists in Reuters’ September 3 poll expected a 25 basis point ECB deposit rate increase to 2.50% on September 10, but most saw it as the final hike: inflation had reached 3.3%, yet the jump was largely ener...
- The forecast was for restrictive policy to last through at least mid 2027, rather than for rates to keep rising.
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openai.comCreate a landscape editorial hero image for this Studio Global article: Why did a Reuters poll of 65 economists expect the European Central Bank to raise its deposit rate by 25 basis points to 2.50% on September. Article summary: The poll reflected a balancing act: economists expected one “insurance” hike to prevent an energy shock from spreading into wages, core prices, and inflation expectations—but not a sustained tightening campaign against w. Topic tags: general, government, news, general web. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts with f
The Reuters poll pointed to a narrow policy response: act against the risk that an energy shock becomes entrenched in the wider economy, but avoid treating a supply-driven price surge as if it were a demand-led inflation boom.
In the August 31–September 3 survey, all 65 economists expected the European Central Bank to raise its deposit rate by 25 basis points to 2.50% at its September 10 meeting. Reuters described that as the second and likely final increase of 2026—and, if realised, the shortest ECB hiking campaign in 15 years. 4
Inflation was too high to ignore
Euro-area annual inflation accelerated to 3.3% in August from 2.9% in July, moving further above the ECB’s 2% target. Reuters reported that the increase was driven almost entirely by higher energy costs, as crude oil and natural-gas prices rose and refining margins increased amid the Iran war. 5
That still made a small increase credible. ECB policymakers had raised rates in June in part to stop war-fuelled energy costs from spreading more widely through the economy, and Reuters reported in August that policymakers were prepared to raise rates again while showing little appetite to signal further tightening. 2
The practical aim was to reinforce the ECB’s inflation-fighting stance before higher fuel and utility costs could feed into broader prices, wages and inflation expectations.
Why the poll did not anticipate a long sequence of hikes
The key distinction was between headline inflation and persistent, broad-based inflation. The Reuters poll found that most economists did not expect rising energy prices to trigger widespread inflation pressures. 4
Interest rates can curb demand and credit growth, but they cannot directly increase the supply of oil or natural gas. A forceful response to an external energy shock could therefore impose a heavier burden on households and businesses while doing little to reverse the original source of the price increase.
The inflation data supported this more cautious interpretation. While headline inflation rose sharply, core inflation—which excludes volatile food and energy components—eased to 2.4% in August from 2.5% in July, according to reporting on the Eurostat release. 11
That did not eliminate inflation risk. It did, however, suggest that the energy shock had not yet clearly become a self-sustaining domestic inflation cycle.
A 2.50% rate could remain restrictive without further increases
Earlier Reuters polling found that economists expected the ECB to raise the deposit rate to 2.50% and then keep policy unchanged through at least the middle of 2027. 3
This is the logic of a “higher for longer” forecast: the ECB would not need to raise rates repeatedly if 2.50% was judged sufficiently restrictive and if inflation pressure was expected to fade over time. Keeping rates steady would give policymakers time to see whether the energy shock passed through to the wider economy without adding unnecessary pressure to growth and public finances.
It also explains why the forecast was conditional rather than complacent. The Iran conflict and volatile energy markets were the immediate source of uncertainty, while higher global bond yields could make financing conditions tighter even without a long ECB rate-hike cycle. Reuters reported that policymakers’ concern was containing the conflict’s inflationary side-effects, not pre-committing to a specific path beyond September. 2
What could have changed the outlook
The expected September move was not a declaration that the inflation problem was over. More tightening would have become more likely if the evidence shifted from a primarily energy-led shock to persistent underlying inflation—for example, through stronger wage growth, a renewed and sustained energy surge, or clearer signs that businesses were passing higher costs broadly through the economy.
For the poll’s central case to hold, two things needed to remain true: energy-driven inflation had to stop broadening, and inflation expectations had to stay anchored. If either condition failed, the projected long pause at 2.50% would have been much less certain. 4
Bottom line
Economists expected one more ECB increase because 3.3% inflation and an ongoing energy shock called for a visible response. They expected the ECB to stop at 2.50% because the surge was largely tied to energy, while evidence of broader inflation pressure appeared limited. The projected stance was therefore restrictive and patient—not an open-ended campaign of rate increases. 4
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All 65 economists in Reuters’ September 3 poll expected a 25 basis point ECB deposit rate increase to 2.50% on September 10, but most saw it as the final hike: inflation had reached 3.3%, yet the jump was largely ener...
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All 65 economists in Reuters’ September 3 poll expected a 25 basis point ECB deposit rate increase to 2.50% on September 10, but most saw it as the final hike: inflation had reached 3.3%, yet the jump was largely ener... The forecast was for restrictive policy to last through at least mid 2027, rather than for rates to keep rising.
Sources
reuters.comECB to raise rates a second time in September, but then done, say ...
investing.comEuro zone inflation hits 3.3% in August as energy costs fuel price ...