ActionForex Predicts ECB Will Hold Rates Through 2027

ActionForex revised its interest rate forecast for the European Central Bank, predicting the bank will not cut rates in 2027. The analysis expects a final 25 basis point hike in September 2026, which would bring the deposit rate to 2.50%. The firm projects the rate will remain at this level throughout the following year.

This shift in outlook follows a more resilient growth backdrop. Key drivers include recovering manufacturing, global investment in artificial intelligence infrastructure, and supportive fiscal policies in France and Germany.

While conflict in Iran has increased consumer prices and corporate costs, the report indicates that underlying inflation remains contained. Because there are no significant spillovers to food or other goods, the European Central Bank is expected to keep rates at the upper end of its neutral range. This strategy aims to prevent inflation from becoming de-anchored without entering restrictive territory that would deliberately weaken demand.