ECB: 57 per cent of market participants expect a temporary adjustment of up to 3 per cent by early 2027 (Assiom Forex)

A new round of cuts in the second half of the new year

(Il Sole 24 Ore Radiocor) - A temporary adjustment to interest rates, with a final tweak by early 2027, followed by a pause, before resuming with a gradual cycle of cuts in the second half of the new year. This is the forecast of the majority of Assiom Forex members (57%) surveyed on the ECB’s monetary policy trajectory in the September poll conducted by the association in collaboration with Il Sole 24 Ore Radiocor.

“Regarding the ECB’s next moves between now and the end of 2027, following the latest 25 basis point rise that brought the deposit rate to 2.50 per cent, most market participants suggest that the rate could rise to as high as 3 per cent at the start of the new year, followed by a period of stability and then a series of cuts in the second half of 2027, which could bring the ECB rate back to between 2.25 per cent and 2.50 per cent”, explains Massimo Mocio, president of Assiom Forex. Just over one in three (35%), however, expects prolonged monetary tightening to combat persistent inflation, with another rise by the end of 2026 and a possible peak of between 2.75 per cent and 3 per cent, which is expected to remain unchanged throughout 2027. A clear minority (8%) forecast a pause and an early rate cut, namely, rates remaining at 2.50% for the rest of 2026 and the start of easing as early as the first half of 2027, driven by a faster-than-expected fall in core inflation.

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