ECB and BOE Rate Predictions for 2026: Divergent Views Among Major Banks

Major financial institutions have released their predictions for the European Central Bank (ECB) and the Bank of England (BOE) interest rate movements in 2026. According to Jin10, Barclays, Goldman Sachs, JPMorgan, Morgan Stanley, Deutsche Bank, and UBS Global Research anticipate the ECB will raise its deposit facility rate, currently at 2%, to 2.5% through various increments in April, June, July, and September. In contrast, HSBC and Bank of America expect the ECB to maintain the rate at 2% throughout the year. For the BOE, which currently has a rate of 3.75%, Barclays and Standard Chartered foresee a rate cut in the second quarter of 2026, aligning with previous expectations. JPMorgan predicts a rate increase to 4% in June, while UBS Global Research expects a rate cut to 3.5% in November. Citibank anticipates no change in rates, contrary to earlier forecasts of cuts in June and September. Bank of America projects rate hikes in June and July, reaching 4.25% by year-end, deviating from earlier expectations of rate cuts. Morgan Stanley and Goldman Sachs expect the BOE to maintain its rate, with Goldman Sachs predicting a gradual reduction to 3% next year.