The European Central Bank is gearing up to hike interest rates twice this year, a move that would mark a sharp reversal from the easing trajectory markets had grown comfortable with. A Bloomberg economist survey conducted between May 4-7, 2026, shows the consensus now expects 25 basis point increases in both June and September, lifting the deposit facility rate from 2.00% to 2.50%.
That’s not what most forecasters were calling for just weeks ago. Earlier predictions had penciled in only a single hike for the year. But surging energy prices, driven by ongoing conflict in Iran, have pushed euro-area inflation to an estimated 2.9% to 3%, well above the ECB’s 2% target.
The inflation math changed fast
The ECB held rates steady at its most recent meeting on April 30, 2026. ECB President Christine Lagarde and prominent board member Isabel Schnabel have both signaled that tightening is now the priority. Schnabel has been particularly blunt, warning that waiting for wage pressures to materialize before acting could prove “too late” given the trajectory of energy-driven inflation.
Market pricing reflects this hawkish pivot. There is now a 91% probability assigned to a rate hike at the next ECB meeting on June 11, 2026.
