Due to persistent inflation, economists expect the European Central Bank (ECB) to continue its rate hikes after the summer and raise the policy rate to a peak of 4 percent in September.
Due to the high course of inflation, economists’ interest rate expectations have also increased. Economists expect the policy rate to peak at 4%. Previously, this expectation was 3.75%.
Economists participating in the survey expect an interest rate hike of 25 basis points and then 25 basis points at the meeting to be held on July 27.
Although a slowdown in inflation is expected in the 20-member Eurozone economy in the coming months, it is expected that this will not happen quickly. In the survey, the 2025 inflation expectation increased from 2 percent to 2.1 percent, while the 2024 and 2025 inflation projections increased to 2.8 and 2.4 percent, respectively.
In the survey, the growth forecast for 2024 was 1 percent and 1.6 percent for 2025.
Despite optimistic expectations, analysts expect the first rate cut to begin in April 2024.
There are different opinions within the ECB as to whether the tightening will continue after the summer. While some bank officials are warm to interest rate hikes after the summer, others voice their concerns that the economy will enter a moderate recession.