ECB survey puts December 2026 deposit rate at 2.75%, up from 2.50%

Survey points to a December increase

The survey collected responses from 69 analysts between 12 and 14 October. For December, forecasts at both the 25th and 75th percentiles put the deposit rate at 2.75%. That points to a strong concentration around a 25 basis point increase, though not unanimity. The median then stays at 2.75% through September 2027 and for the fourth quarter of that year. Rate cuts appear in the median only in 2028, at 2.50% in the first half and 2.25% by year end.

For the meeting nearest the survey, the average probability of an unchanged rate was 85.6%, against 13.9% for a 25 basis point increase. For the following meeting, the average probability of a 25 basis point increase rose to 77.6%.

The survey is not an official ECB forecast and does not bind the Governing Council. Its panel expects tightening, not easing: with quarterly growth forecast at 0.3%, elevated rates increase the cost of investment and credit.

The October hold and inflation

The ECB left all three rates alone on 29 October 2026. The deposit rate was 2.50%, main refinancing 2.65%, marginal lending 2.90%.

That followed a 25 basis point increase on 10 September 2026, effective 16 September, which took the deposit rate to 2.50%. The ECB had already raised rates in June 2026, its first hike in about three years. Lagarde said inflation was set to remain well above target for an extended period, pointing to the conflict in West Asia. September staff projections put headline inflation at 3% in 2026, 2.5% in 2027 and 2.1% in 2028. The survey's quarterly path is higher near term: the median puts HICP inflation at 3.9% in the fourth quarter of 2026, falling to 2.1% in the fourth quarter of 2027 and 2.0% from early 2028. Core HICP is expected to rise from 2.5% in the fourth quarter of 2026 to 2.7% in early 2027. Against the ECB's 2% target, that is a slow return.

Brzeski: direction of travel is a hike

Carsten Brzeski, ING's chief economist for the eurozone, said the direction of travel was clear for the next meeting. He described it as one of a rate hike.

He argued there are hardly any indirect or second-round effects visible in the European economy. With core inflation stable, he said, the ECB can avoid overreacting to an energy-driven rise in headline prices. Higher bond yields since September have worsened financing conditions across Europe, doing some of the central bank's restrictive work for it. Brzeski said the ECB had probably a very heated debate, which Lagarde confirmed at her press conference.

Lagarde's exit lands on the same decision

Lagarde told the Governing Council and European Council President António Costa on 29 October 2026 that she would step down on 7 February 2027.

The announcement came the same day as the rate hold. Brzeski called the timing, only hours before a policy announcement, rather special. Lagarde said at her press conference that she wanted greater freedom to express personal views. Whoever takes over will inherit a council that has raised twice this year and that the survey panel expects to raise again in December.

What happens next

PKO BP expects a 25 basis point increase in December. It sees a return to cuts in late 2027 only under a favourable scenario, earlier than the survey median, which shows a decline only in 2028.

The ECB will receive new data and an updated inflation projection before its December decision. The central bank says it is not pre-committing to a particular rate path and will decide meeting by meeting.