European Central Bank, euro symbol and Frankfurt financial district

ECB poised for first rate hike of the cycle on 11 June as Vujčić takes over as Vice-President

ByMihai EU

The European Central Bank heads into one of its most consequential meetings in years with a new figure at the top table. Boris VUJCIC, governor of the Croatian National Bank, takes office as ECB Vice-President on 1 June 2026, beginning a non-renewable eight-year term after his appointment by the European Council. He succeeds Luis DE GUINDOS, who steps down after eight years in the role.

A meeting that could end years of caution

Ten days later, on 11 June, the Governing Council meets to set rates and publish fresh staff projections. Markets are betting on the Bank’s first increase of the cycle: a quarter-point move that would lift the deposit facility rate towards 2.25%. At its last meeting on 30 April the Council held the three key rates steady – the deposit rate at 2.00%, the main refinancing rate at 2.15% and the marginal lending rate at 2.40% – while warning that upside risks to inflation and downside risks to growth had both intensified.

Energy-driven inflation forces the question

Euro area inflation accelerated to 3.0% in April, up from 2.6% in March and well above the 2% target, driven by an energy-price surge tied to the war in the Middle East. President Christine LAGARDE said the April decision to hold was unanimous but that a hike had been debated at length, calling June the right moment for a fresh assessment. Executive Board member Isabel SCHNABEL has been blunter, telling Reuters that looking through the shock is no longer an option and that a June increase will be needed.

What to watch

A Bloomberg survey of economists points to quarter-point rises in both June and September. Some pressure has eased as oil cooled to around USD 92 a barrel at the end of May, after its worst month since the pandemic, but the inflation picture remains unsettled. Unlike the easing cycle that ended in mid-2025, the ECB now weighs tightening into an energy shock while growth is soft – and Vujcic, long a data-dependent voice on the Council, arrives just as that judgement falls due.

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