ECB seen raising rates 25bps June 11

Economists and investors on June 4 were converging on a 25-basis-point European Central Bank rate increase at the Governing Council’s June 11 meeting, a move that would lift the deposit facility rate to 2.25%. A Reuters poll published in May found 59 of 70 economists expected that outcome, up from 44 of 85 in an April survey. The ECB’s own rate table shows the deposit rate was 2.00% after its last move, effective June 11, 2025. The June decision is also one of the ECB’s quarterly forecasting meetings, putting fresh staff projections for inflation and growth at the center of market attention. ### Why are traders treating a June move as the base case? A May Reuters poll showed 59 of 70 economists expected the ECB to raise the deposit rate by 25 basis points in June to 2.25%. That survey also showed expectations for further rises later in 2026, with 37 of 70 economists looking for at least two increases during the year. The shift from April’s poll suggested tightening expectations had strengthened as inflation concerns persisted. (vtmarkets.com) Market pricing has been pointing in the same direction. A market-based tracker cited investors as assigning high odds to a June 11 increase, reflecting expectations that the ECB would keep tightening if inflation stayed above target. ### What rate would change on June 11? The ECB steers policy through the deposit facility rate, according to its official rates page. That page shows the deposit facility rate at 2.00%, the main refinancing operations rate at 2.15% and the marginal lending facility at 2.40% after the last change effective June 11, 2025. (vtmarkets.com) A quarter-point increase in June 2026 would take the deposit rate to 2.25%. (rateprobability.com) The deposit facility matters because it is the rate banks receive for overnight deposits with the Eurosystem. Since March 2024, the ECB has said it uses that rate to steer the monetary policy stance. ### Why do the staff projections matter as much as the rate move? The ECB publishes macroeconomic projections four times a year — in March, June, September and December — and says those forecasts help the Governing Council assess economic developments and risks to price stability. (ecb.europa.eu) The June 11 meeting therefore comes with a fresh set of staff estimates for inflation, growth, wages and unemployment. Philip Lane, the ECB’s chief economist, told Nikkei in remarks published by Bloomberg on May 26 that the central bank would probably raise its inflation projections in June. “We are likely to make a further upward adjustment to the inflation forecast in June,” Lane said, citing elevated oil prices linked to the war in the Middle East. (ecb.europa.eu) ### What are officials and economists watching beyond June? The Reuters poll found 37 of 70 economists expected the deposit rate to be raised at least twice in 2026, indicating that June is not seen as the end of the debate. That leaves investors focused on whether the ECB signals more tightening after June or frames the move as a response to current inflation risks. (bloomberg.com) March 2026 ECB projections said the war in the Middle East had caused spikes in oil and gas prices that would push up inflation, while also weakening growth by eroding purchasing power and hurting confidence. Those cross-currents have left the June projections under close scrutiny for any change in the path back toward the ECB’s 2% inflation target. (vtmarkets.com) ### What happens on June 11? The ECB’s June 11 meeting will deliver both the rate decision and updated staff projections. President Christine Lagarde is expected to present the decision, while Lane’s earlier remarks have made the inflation forecast a key point for investors to watch in the ECB’s statement and press conference. (ecb.europa.eu)