ECB to Hike Rates in June as 2026 Inflation Jumps, Survey Shows

The European Central Bank will raise interest rates in June as the Iran war drives inflation higher this year, a Bloomberg survey showed.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — The European Central Bank will raise interest rates in June as the Iran war drives inflation higher this year, a Bloomberg survey showed.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.The quarter-point increase is likely to be the only such move, however, as the conflict won’t cause a long-lasting price shock, according to the April 9-15 poll.Inflation is predicted to accelerate to 2.8% this year — up from a prior prediction of 2%. It’s then expected to fall back to 2.1% in 2026 and 2% in 2027 — in line with the ECB’s target.ECB officials are currently leaning toward keeping rates on hold when they next meet at the end of April, according to people familiar with the debate. Some, including Bundesbank President Joachim Nagel, argue that action at that point can’t be excluded.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.When economists were last polled, before the ECB’s March meeting, they predicted the central bank would sit out the conflict without any response. Investors have been pricing more forceful action and are currently betting on two hikes this year. The fighting in the Middle East and resulting spike in energy costs have put the ECB in a tricky spot as raising borrowing costs would crimp a nascent economic recovery in the 21-nation euro zone. Analysts reckon output will rise just 0.9% this year — down from an earlier forecast of 1.2% as higher energy prices weigh on companies and households. Growth is then seen picking up to 1.3% in 2027 and 1.4% in 2028. Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.365 Bloor Street East, Toronto, Ontario, M4W 3L4© 2026 Financial Post, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.You can manage saved articles in your account.and save up to 100 articles!You can manage your saved articles in your account and clicking the X located at the bottom right of the article.