Commerzbank economists forecast a September rate hike as core inflation and expectations rise, keeping ECB policy biased toward tightening.
The European Central Bank is expected to hold rates steady in July but deliver a 25 bps hike in September, according to economists. Their ChatECB AI indicator signals a hawkish stance among Governing Council members, driven by rising core inflation and higher household inflation expectations.
Euro area inflation is projected to remain just below 3% in the coming months, with core inflation trending upward. Persistent inflation risks, including pass-through effects from energy costs, may necessitate further tightening to anchor expectations.
The ECB paused in June after consecutive hikes, but September’s decision will hinge on inflation data and economic projections. Markets are pricing in a potential move as policymakers seek to curb inflation persistence.