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ECB Expected To Raise Rates On Sept. 10 As Tightening Cycle Nears End

The European Central Bank is widely expected to raise interest rates on Sept. 10, marking what economists see as the second and final increase in its shortest tightening cycle in 15 years, according to a Reuters poll.

Inflation Pressure Persists, But The Case For More Tightening Is Limited

A Reuters survey conducted from Aug. 31 to Sept. 3 found that most economists do not expect higher energy prices to create broader inflationary pressure, despite the renewed escalation of the war in the Middle East. That view has tempered expectations for a more aggressive policy response.

ECB watchers also expect policymakers to avoid adding pressure to an already fragile eurozone economy, even as global bond yields have risen sharply in recent days.

Energy Costs Lift Inflation, But Not The Outlook For A Third Hike

Eurozone inflation accelerated to 3.3% in August, moving further above the ECB’s 2% target. Energy costs were the main driver, strengthening the case for another rate increase, but most economists said the latest data did not warrant a third hike.

That assessment differs from interest-rate futures markets, which are pricing in another increase.

Strong Consensus Points To A Quarter-Point Increase

All 65 economists surveyed by Reuters expect the ECB to raise its deposit rate by 25 basis points to 2.50%. That represents a stronger consensus than in the August poll, when 83% expected a September increase, and ahead of the July meeting, when 72% predicted a move.

The ECB left rates unchanged in July, while its most recent increase came in June.

Markets See A Pause After September

Around 91% of economists expect the deposit rate to end the year at 2.50%, while 78% believe it will remain there through the middle of next year.

Those expectations have held despite the more difficult geopolitical backdrop and sharply higher borrowing costs across global bond markets. Most economists appear to view the recent inflation increase as largely energy-driven and therefore unlikely to develop into persistent, broad-based price pressure requiring prolonged monetary restraint.

If the ECB raises rates as expected in September, most economists surveyed by Reuters believe the move will mark the end of the central bank’s latest tightening cycle.

Cyprus’ Strong Youth Employment Rate Still Does Not Guarantee Early Independence

Young people in Cyprus have a relatively high employment rate, but they leave the parental home later than the EU average, according to Eurostat data.

Cypriots left home at an average age of 27 in 2025, compared with 26.3 years across the EU. At the same time, 72.3% of people aged 20 to 29 in Cyprus were employed, well above the EU average of 65.5%.

Strong Employment Does Not Mean Early Independence

Only nine countries recorded higher youth employment rates than Cyprus. Iceland led at 85.3%, followed by the Netherlands at 84%, Malta at 82.1%, Switzerland at 78.3% and Germany at 77%.

Norway recorded 76.5%, Ireland 76.1%, Denmark 74.8% and Austria 74.6%. Eurostat said countries where young people leave home earlier generally tend to have higher youth employment rates.

Southern Europe Sees Later Moves

Finland had the lowest average age for leaving the parental home at 21.4 years, followed by Denmark at 21.8 and Estonia and Lithuania at 22.7. Croatia recorded the highest average at 31.5 years, followed by Greece and Slovakia at 30.9. Spain and Italy both stood at 30.2 years.

Across the EU, the average has remained close to 26 since 2002, rising only slightly from 26.2 years in 2024 to 26.3 years in 2025.

Cyprus Labour Market Is Cooling

The figures come as Cyprus’ labor market shows some signs of easing, although demand for workers remains relatively strong by European standards.

Separate Eurostat data showed Cyprus had the EU’s largest annual decline in its job vacancy rate in the second quarter of 2026. The rate fell to 2.6% from 3.3% a year earlier, but remained above the EU average of 2.0% and the euro area average of 2.1%.

Cost Of Living Remains A Factor

Housing and other living costs can also affect how quickly young workers establish independent households. Eurostat reported that Cyprus’ household consumption price level was 89.2% of the EU average in 2025.

A relatively lower overall price level does not eliminate affordability pressures for people on modest incomes. For younger workers, the issue can be whether wages are sufficient to cover rent, utilities, food and other basic expenses.

Cyprus therefore combines relatively high youth employment with a later transition to independent living, suggesting that access to work and the ability to afford a separate household do not always move together.

Uol
Aretilaw firm
eCredo
The Future Forbes Realty Global Properties

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