European Economic Comment: ECB: September hike remains our baseline

Research evidence excerpt

European Economic Comment: ECB: September hike remains our baseline

Global Research

23 July 2026ab

European Economic Comment Economics

Europe including UKECB: September hike remains our baseline

Reinhard Cluse

Economist

Key conclusions from the ECB press conference reinhard.cluse@ubs.com

+44-20-7568 6722

As firmly expected, the ECB kept the depo rate unchanged at 2.25% today. Based on

President Lagarde's press conference, we stick to our call of a 25bps rate hike to 2.5% in Franziska Fischer

EconomistSeptember, which , according to our current assessment, would complete the

franziska.fischer@ubs.com

tightening. We think the key risks to our view – on the dovish as well as the hawkish side +41-44-239 2054

– are related to the events in the Middle East, and their implications for energy prices.

Felix Huefner

We expect the ECB to hike rates by 25bps to 2.5% in September

felix.huefner@ubs.com

Although Ms Lagarde made it clear that the ECB does not currently see signs of pro- +49-69-1369 8280

inflationary second-round effects, her press conference contained a number of hawkish

Anna Titareva

signals, which in our view support the expectation of a September hike. First, she Economist

disclosed that, while today's rate decision was eventually taken in a unanimous vote, anna.titareva@ubs.com

some Governing Council members had raised the option of a rate hike. Second, the +44-20-7568 5083

ECB made it clear that it sees the inflation risks as skewed to the upside; the ECB did not

Reinout De Bock

repeat its assessment, put forth at the Sintra conference, that risks are "more balanced". Strategist

Ms Lagarde said the full effect of the energy price increases caused by the Middle East reinout.de-bock@ubs.com

conflict still had to "play out".