First Read: European Economic Comment "ECB hikes 25bps, points to ongoin..."

Research evidence excerpt

First Read: European Economic Comment "ECB hikes 25bps, points to ongoin..."

Global Research

11 June 2026ab

First Read

EconomicsEuropean Economic Comment

ECB hikes 25bps, points to ongoing data- Europe including UK

dependence Reinhard Cluse Economist

reinhard.cluse@ubs.com

+44-20-7568 6722

25bps rate hike to 2.25%, as expected Franziska Fischer

As firmly expected, the ECB just hiked the depo rate by 25bps to 2.25%. According to Economist

franziska.fischer@ubs.comthe ECB, "[t]he war in the Middle East is generating inflation pressures, and the decision

+41-44-239 2054

to raise rates is robust across a range of scenarios mapping out how the shock might

evolve and affect the medium-term outlook for the euro area" – thus stressing that it Felix Huefner

saw a clear case for today's hike. Economist

felix.huefner@ubs.com

+49-69-1369 8280

As regards the policy outlook the ECB avoided clear guidance and stuck to the now

Anna Titareva

familiar statement according to which "the Governing Council remains well positioned

Economist

to navigate the uncertainty caused by the war. It will closely monitor the situation and anna.titareva@ubs.com

follow a data-dependent and meeting-by-meeting approach to determining the +44-20-7568 5083

appropriate monetary policy stance. (...) The Governing Council is not pre-committing to

a particular rate path."

New macro projections and alternative scenarios

As expected, the ECB's updated macro projections show a downgrade to the growth

outlook and upward revisions to inflation. Revisions to headline inflation were close to

our expectations, with upward adjustments of 0.4pp and 0.3pp for 2026 and 2027,

respectively, to 3.0% and 2.3%, while the 2028 forecast was nudged down by 0.1pp to

2.0%.