New ECB call: No cuts in 2027

Danske Research Team Danske Bank A/S

We revise our ECB call and no longer expect the ECB to cut rates in 2027. We still expect a final 25bp hike in September, taking the deposit rate to 2.50%, but now expect the ECB to keep it there throughout 2027 rather than cut it back to 2.00%.

The change reflects a more resilient growth backdrop than we previously assumed. While stronger growth removes the need for cuts next year, contained underlying inflation limits the need for more than one additional hike. We see the risks to our call as balanced.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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