ECB Set to Raise Rates in June as War-Driven Inflation Pressures Build

The European Central Bank is expected to raise its deposit rate in June 2026 and at least once more this year as higher energy prices from the Middle East war threaten to keep inflation above target, a Reuters poll published May 13, 2026, showed. About 85% of economists surveyed May 8-13, or 59 of 70, forecast a 25-basis-point increase to 2.25% in June. Nearly half, 34 of 70, expect another hike later in 2026, most likely in the following quarter. Markets are pricing more tightening, but economists said limited evidence of second-round inflation effects and weak growth argue against aggressive moves. Inflation is running more than 1 percentage point above the ECB’s 2% target, with Brent crude still above $100 a barrel and more than 50% above pre-war levels. Economists expect inflation to average 3.2% for the rest of 2026 and 2.8% for the full year, while quarterly growth is forecast at just 0.1% through the first half of 2026.