European Central Bank Expected to Implement New Interest Rate Hike in September

Ahead of the European Central Bank's meeting in two weeks, the resilience of the eurozone economy and inflation risks have brought the possibility of a new interest rate hike in September to the agenda.

September Meeting and Interest Rate Expectations

The European Central Bank's next interest rate decision will be made at the meeting scheduled for September 10. Although the bank targets a medium-term inflation rate of 2 percent, inflation hovering at 2.9 percent in the eurozone is prompting monetary policymakers to take action.

Economic Growth and Resilience Data

Supported by artificial intelligence investments and public spending, the eurozone economy grew by 0.4 percent in the second quarter of 2026 compared to the previous quarter. Meanwhile, the German economy recorded a growth of 0.3 percent in the second quarter.

Energy and Gas Price Risks

In the minutes of its July meeting, the ECB stated that rising gas and fuel prices represent the greatest threat. The minutes emphasized the risk that gas prices could create an inflationary shock similar to that of 2022.

Assessment of Precautionary Rate Hike

Carsten Brzeski, Global Head of Macro Research at ING, stated that any potential move in September would be in the nature of a precautionary interest rate hike.