By Marta Vilar – MADRID (Econostream) – Economists surveyed by Econostream overwhelmingly expect the European Central Bank to leave interest rates unchanged at next week's Governing Council meeting but continue to view the decision to hold as a pause rather than the conclusion of the current tightening cycle.

The inaugural Econostream ECB Survey, conducted among 20 economists who closely follow the ECB for banks, brokerages and research firms, found an almost unanimous expectation that policymakers will leave the deposit facility rate unchanged at 2.25% next week. Yet respondents generally continue to expect one further increase before the cycle reaches its peak.

A full breakdown of the survey, including detailed charts and methodology, is available in the Econostream ECB Survey – July 2026 Report. 

July hold seen as a wait for new projections

Although respondents overwhelmingly expected no change in rates next week, most continued to regard the ECB's tightening cycle as active. The prevailing view was that policymakers would prefer to wait for the September staff projections before taking another step, with several respondents also pointing to the absence of convincing evidence of second-round inflation pressures.

Among those expecting a hold, virtually all saw a 25bp increase as the most likely alternative outcome, reinforcing the view that July is widely regarded as an interim meeting rather than a turning point.

Terminal rate still seen above current levels

Respondents' views on where the cycle ultimately ends were relatively concentrated. The dominant expectation remained for a terminal deposit facility rate of 2.50%, while a smaller group expected the peak to be lower and only one isolated respondent foresaw a higher terminal rate.

The timing of that peak broadly matched those expectations. Respondents expecting a 2.50% terminal rate mostly anticipated it would be reached during the third quarter of 2026. 

Communication seen largely unchanged

The survey also suggests little appetite for significant changes to the ECB's communication.

Respondents generally expected the language on both inflation and growth risks in the monetary policy statement to remain broadly unchanged from June, with only a small minority anticipating a more hawkish or more dovish formulation. A similar consensus emerged regarding President Christine Lagarde's overall tone at the post-meeting press conference, which most respondents expected to remain broadly unchanged.

Views were more mixed, however, on how explicitly Lagarde would address the timing of the next rate increase. Economists were evenly split between expecting President Lagarde to lean towards a September move and expecting her to provide no meaningful signal, suggesting considerable uncertainty over how much forward guidance she will be willing to provide.

The complete results, including all survey questions and charts, are available in the Econostream ECB Survey – July 2026 Report.