Europe
ECB raises rates for first time since 2023 as Iran war drives inflation
Deposit rate moves to 2.25% with markets pricing two more hikes by spring 2027, but Deutsche Bank warns the tightening cycle will stop after September as growth weakens.
Person
Mark Wall
Chief European economist, Deutsche Bank
What we have reported
- Argued the ECB is wrong to pursue a 'look through' strategy and expects only one more rate hike in September before the cycle ends.
- Said the ECB will want to avoid markets interpreting June's move as a one-off hike.
- Noted the ECB statement does not pre-commit to a June hike but does not rule one out either, with rising concern the longer the Middle East conflict continues.
Coverage
Europe
ECB set to raise rates as energy shock keeps inflation above target
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ECB holds rates at 2% as inflation jumps to 3% on energy shock
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The European Central Bank kept its key deposit rate unchanged for a third consecutive meeting on Thursday, judging that a modest recovery and sticky services inflation warrant patience despite price growth accelerating to 2.2% in September.
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