ECB policymakers see inflation risks but leave timing of further rate rises open
ECB policymakers say energy-driven inflation could rise further, but they have so far seen little spillover into other prices or wages. A Reuters poll found 64 of 73 economists expect the ECB to hold its 2.50% deposit rate on 29 October and raise it by 25 basis points in December; officials say future moves will depend on incoming data.
Bottom line — The Reuters poll puts a December hike at 64 of 73 economists, while ECB policymakers have not committed to a timetable.
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Reuters reported September inflation at 3.8%, nearly double the ECB’s 2% target.
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Slovenian central bank chief Primoz Dolenc told Reuters that higher energy costs have so far had limited pass-through to underlying inflation and wages.
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ECB meeting accounts said inflation risks were tilted upwards, while policymakers also noted that second-round effects had not yet emerged.
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ECB chief economist Philip Lane said fiscal support for growth is likely to wane in 2027, damping both economic expansion and inflationary pressure.
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ING said the September minutes showed the council was united behind the 25-basis-point hike to 2.50%, but gave a more balanced outlook than ECB President Christine Lagarde’s press conference.
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Nordea analyst Jan von Gerich said the minutes fit its forecast of 25-basis-point hikes in December and March; the ECB has declined to pre-commit.