Economists at ABN Amro have revised their European Central Bank (ECB) policy rate forecasts. The central bank is now expected to raise its deposit rate to 2% most likely by the end of 2022.

Upgrading the view of the ECB rate peak

“We now expect the ECB to raise its deposit rate to 2% most likely by the end of this year. In our revised base case, we see another 75 bps hike in October, followed by a 50 bps step in December. The policy rate then settles at 2% through 2023.” 

“The most likely alternative to this base, is three steps of 50 bps, which would mean the terminal rate is reached in February of next year. We had previously signalled a peak rate of 1.5%.”