ECB Braces for Energy Shock Impact
It is expected that the European Central Bank will raise interest rates again in September 2026, reaching 2.50%. This is likely to be the last hike during the current monetary tightening cycle, due to the ongoing rise in energy prices and increasing inflationary pressures resulting from geopolitical tensions between the United States and Iran. Forecasts indicate that interest rates will remain at this level until mid-2027, with inflation continuing to rise to around 3%, and it is unlikely to return to the target 2% before the third quarter of 2027. Despite the anticipated stronger economic performance, the persistent rise in energy prices keeps risks present, with a need to monitor their impacts on inflation and the markets for goods and services.
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