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IMF expects at least one more 25 bps ECB rate hike in 2026

By Thomson Reuters Oct 16, 2026 | 5:03 AM

BANGKOK, Oct 16 (Reuters) – The European Central Bank is likely to raise interest rates by ​25 basis points at least ‌one more time this year to fight high inflation, the International Monetary Fund said on Friday in its ‌regular ​forecast report for ⁠Europe.

The ECB has already ⁠raised rates by 25 bps in both June and in September to counter rising inflation caused ​by the surge in energy prices as a result ⁠of the US-Israeli ⁠war on Iran.

“IMF analysis shows ​that at least one further 25 ​bps increase in policy rates ‌in 2026 will be required to ensure that core inflation remains well contained,” the IMF said.

“While ⁠policy beyond 2026 should evolve based on incoming data, further tightening is likely ⁠to be ‌warranted to ensure that ⁠inflation returns to target ​in ‌2028,” it said.

“Fiscal support ​to mitigate ⁠the effects of higher energy prices, if not carefully calibrated, could undermine disinflation efforts,” the report said.

(Reporting by Jan Strupczewski; Editing by ​John Mair)