Focus Europe: ECB Reaction: A robust hike

Research evidence excerpt

Focus Europe: ECB Reaction: A robust hike

Deutsche Bank

Research

Europe Economics Date

11 June 2026

Focus Europe

ECB Reaction: A robust hike

Mark Wall

We were expecting the ECB to hike and use its communications to try to keep

Chief Economist

market pricing more or less unchanged, and this is exactly what happened.

Peter Sidorov, CFA

The ECB hiked 25bp to 2.25%. This is the first change in ECB policy rates for a year, Senior Economist

the first hike by the ECB since September 2023 and – importantly – the first hike by Clemente Delucia

one of the major global central banks in response to the Middle East energy shock. Senior Economist

This is significant. It means the ‘look through’ strategy is not a robust policy Yacine Rouimi

response, at least not in every region. This decision is not without debate, of course. Senior Economist

Sanjay Raja

There was a certain degree of balance within the ECB communications, with some

Chief UK Economist

slightly more hawkish elements counterbalanced by slightly more dovish

elements, helping to keep market pricing anchored around three hikes. In the Michael Kirker

context of still elevated uncertainty – about the situation in the Middle East, about Economist

the path of energy prices and about the propagation of energy inflation into general Maria Contreras

inflation – it is understandable why the ECB does not want to send significant Economist

signals. Kuhumita Bhattacharya

Research Associate

Our baseline is unchanged. We look for one more hike to 2.50% in September. Our

Hema Kumari

baseline assumes a US-Iran deal by the end of June and weaker GDP growth than

the ECB expects. Inevitable indirect inflation justifies a second hike despite this.

Beyond September, risk premia for some further policy tightening are likely to