Key facts
- IMF expects at least one more 25 bps ECB rate hike in 2026.
- IMF forecasts further tightening may be needed to meet 2028 inflation target.
- ECB raised rates by 25 bps in June and September to counter inflation.
- ECB increased key rates by 25 bps on September 10, 2026, to 2.50%, 2.65%, and 2.90%.
The International Monetary Fund expects the European Central Bank to implement at least one more 25 basis point interest rate hike in 2026 to combat high inflation, according to its regular forecast report for Europe released on Friday. The IMF analysis suggests further tightening will be necessary to ensure inflation returns to the 2% target by 2028. The ECB has already increased rates twice this year, in June and September, to counter inflation driven by rising energy prices. The IMF also cautioned that fiscal support measures, if not carefully calibrated, could hinder disinflation efforts. In a separate announcement on September 10, 2026, the ECB Governing Council raised its three key interest rates by 25 basis points, bringing the deposit facility rate to 2.50%, the main refinancing operations rate to 2.65%, and the marginal lending facility rate to 2.90%. The ECB's latest staff projections indicate headline inflation averaging 3.0% in 2026, with core inflation at 2.5%.