Poll: Economists expect ECB to hold rates in October and raise them in December

A poll conducted by Reuters showed that 70 out of 73 economists surveyed expect the European Central Bank to hold the deposit facility rate at 2.50% at its upcoming meeting on October 29, while only three expected a different decision.

In contrast, 64 of the 73 economists expected the bank to raise interest rates by 25 basis points in December, according to the poll reported by MarketScreener. This indicates that the market anticipates a short-term pause followed by another rate hike before the end of the year.

These expectations come after Eurozone inflation reached 3.8% in September, nearly double the bank's target of 2%. Rising prices are pushing the bank to maintain a tight monetary policy rather than cutting interest rates.

What Do These Terms Mean?

**Deposit Facility Rate:** The interest rate at which commercial banks deposit money with the central bank, used as a key tool to guide monetary policy in the Eurozone.

**Basis Point:** A small unit of measurement for interest rates, where 100 basis points equal 1%. It is used because rate changes are often too small to be measured directly in percentage points.

**Inflation:** The continuous rise in the prices of goods and services, which the central bank measures to compare the current trajectory against its annual target.

**European Central Bank:** The institution responsible for monetary policy in the Eurozone and for maintaining price stability within it.