Will ECB hike or keep interest rate unchanged?

The European Central Bank is set to announce its Monetary Policy Decision on September 14, and as the release time approaches, economists and researchers from 10 major banks predict a range of outcomes. Markets are split, with 26 analysts polled by Bloomberg seeing no change and 23 seeing a 25-bps hike to 4%. A small majority of experts assume that the ECB will not raise rates further.

Economists from Nordea believe that the ECB is torn between whether to hike rates again or not, with the Governing Council signaling preparedness to do more at upcoming meetings. Both inflation and growth forecasts could see downward revisions.

TDS’s economists expect the ECB to keep the deposit rate unchanged at 3.75% at the September meeting, marking the end of the tightening cycle.

SociGen expects weakening data to allow the ECB to stay on hold to assess more data, but does not expect the ECB to give up on its hawkish bias before it is fully clear that the 2% target can be achieved in a timely fashion.


Citi’s economists expect ECB staff projections to play a key role in the decision, as they will be coordinated by ECB policymakers, as opposed to national central banks. This has tended to produce more dovish results at least on the 2024 core inflation forecasts.

Wells Fargo expects policymakers to hold rates steady at 3.75%, but may give themselves flexibility to raise rates at future meetings depending on how data evolves, especially core and super-core inflation.

Rabobank narrowly favours a hold on Thursday’s decision, expecting the ECB to maintain that more hikes may still follow due to the deteriorating growth outlook and overtightening becoming a real possibility. Commercial Bank predicts that the ECB is unlikely to raise its key interest rates further due to the weak economy and downward trend in the inflation rate. Other topics could include the end of the PEPP pandemic purchase program and the remuneration of excess liquidity.

Deutsche Bank believes the ECB will stay on hold, but there is uncertainty over European inflation and GDP has been in near-stagnation since last autumn.

Danske Bank expects the ECB to deliver a final 25 bps rate hike due to strong inflation momentum and projected inflation above the target. The end to full reinvestment process of PEPP currently guided for Dec 24 is expected to be on the cards, and the ECB will ‘task committees’ for an announcement at the October meeting.