Analysts predict another ECB rate hike before the end of the year

By the end of the year, the European Central Bank (ECB) will increase three base rates by at least another 0.25 percentage points. This conclusion was reached by the majority (10 out of 11) of experts surveyed by Vedomosti. They cite inflation, which settled at 5.3% in August, and the continuing rise in world energy prices as the main reasons for the continuation of the monetary policy tightening cycle. Four experts believe that the rate increase will occur at the meeting on September 14, two believe that the regulator will keep them at the current level and increase it by 0.25 percentage points in October. One analyst admits that this year the increase could occur twice and the rate on basic financing operations will reach 4.75% by the end of December – against the current 4.25%. Four more experts found it difficult to answer about the timing of the rate increase.

Following the meeting on July 27, the ECB increased all three rates by 0.25 percentage points: the key rate from 4 to 4.25%, the margin rate from 4.25 to 4.5%, the deposit rate from 3.5 to 3. 75%. This was the ninth increase in a row, with the key rate reaching the highs of the 2008 financial crisis.