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The European Central Bank should stop raising interest rates. What do economists say? – executive summary

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Next Thursday, September 14, the European Central Bank will hold its monetary policy meeting, where it is still uncertain what decisions and solutions will be presented and announced by President Christine Lagarde.

However, according to economists consulted by Reuters, the European regulator should keep interest rates stable, and just under half expect another increase this year to bring down inflation.

Although Lagarde acknowledged the possibility of halting the rise in interest rates, inflation remained unchanged at 5.3% in August, well above the European Central Bank’s target of 2%, and with underlying price pressures declining only slightly, which puts a big question mark over the agency’s decision. Organizational.

According to a Reuters poll, 39 out of 69 economists do not expect any change at the meeting scheduled for the 14th, and 30 economists believe the ECB will raise interest rates by another 25 basis points, to 4%.

If achieved, this would raise the deposit interest rate to its highest level since its inception in 1999.

Economists were almost evenly divided on what might happen after the September meeting. 36 of 69 respondents forecast that the base rate should end the year at 3.75%, while 33 said 4.00%.

The room for the European Central Bank to raise interest rates again is shrinking as the risk of recession increases. Major economies like Germany and the Netherlands have already fallen into recession, and most others have barely grown or contracted.

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