ECB Revises Interest Rate Forecast: No Cuts Expected in 2027

The European Central Bank (ECB) has revised its interest rate forecast for next year. The bank now expects to keep interest rates unchanged in 2027, rather than cutting them as previously anticipated.

This change reflects a more resilient economic growth backdrop than initially assumed. While stronger growth removes the need for rate cuts, contained underlying inflation limits the need for additional hikes beyond one more increase this year.

The ECB still expects to raise interest rates by 25 basis points in September, taking the deposit rate to 2.50%. However, instead of cutting it back to 2.00% as previously expected, the bank will now maintain it at this level throughout 2027.