2026.07.2306:36:34UTC+00ECB Expected to Stand Pat After June Hike

The European Central Bank is widely expected to leave interest rates unchanged on Thursday, after June’s first increase in three years, driven largely by higher energy costs. With no new economic projections due, attention will center on President Christine Lagarde’s press conference for signals on the next policy steps. Officials are likely to adopt a cautious yet resolute tone, reinforcing market expectations for one or two additional rate hikes by year-end. The renewed surge in oil prices has again bolstered the case for further tightening, much as it did at the outset of the Iran conflict. A September increase is now almost fully priced in, and barring a significant easing in energy prices, that outlook is unlikely to shift. Beyond that, the ECB’s communication will be crucial in shaping expectations for both the pace and scale of any further policy tightening.