Major brokerages expect ECB rate hikes, delayed BoE cuts as inflation risks rise
April 1 (Reuters) - Global brokerages are increasingly betting the European Central Bank could raise rates as early as April, while pushing back rate-cut expectations for the Bank of England, after policymakers warned the U.S.-Israeli war on Iran is stoking inflation risks.
J.P. Morgan said on Wednesday it now expects just one rate hike this year from Bank of England, after Governor Andrew Bailey told Reuters that markets had been too aggressive in pricing in higher borrowing costs.
Wall Street giants such as Goldman Sachs and Barclays also flagged significant chances of a near-term rate hike by the BoE, potentially as early as April, if global energy prices continue to climb, while J.P. Morgan has priced in rate hikes from the central bank in April and July this year.
Here are the forecasts from major brokerages for ECB:
Brokerage | Pre-meeting policy outlook | Post-meeting policy outlook | Terminal rate by year-end 2026 |
Goldman Sachs | Hold throughout 2026 | 2 hikes in April and June | 2.5% |
J.P.Morgan | Hold throughout 2026 | 2 hikes in April and July | 2.5% |
Morgan Stanley | Hold throughout 2026 | 2 hikes in June and September | 2.5% |
Barclays | Hold throughout 2026 | 2 hikes in April and June | 2.5% |
Deutsche Bank | Hold throughout 2026 | 2 hikes in June and September | 2.5% |
HSBC | Hold throughout 2026 | Hold throughout 2026 | 2.0% |
BofA Global Research | Hold throughout 2026 | Hold throughout 2026 | 2.0% |
UBS Global Research | Hold throughout 2026 | 2 hikes in June and September | 2.5% |
Here are the forecasts from major brokerages for BoE:
Brokerage | Pre-meeting policy outlook | Post-meeting policy outlook | Terminal rate by year-end 2026 |
J.P. Morgan | 2 hikes (April and July) | Rate hike in June | 4.00% |
Deutsche Bank | 2 cuts (June and Q4) | Nil | 3.75% |
Morgan Stanley | 2 cuts (April and November) | Nil | 3.75% |
Citigroup | 2 cuts (June and September) | Nil | 3.75% |
Goldman Sachs | Quarterly cuts from July | Nil | 3.75% |
BNP Paribas | Nil | Nil | 3.75% |
BofA Global Research | 2 cuts (June and September) | 2 cuts (June and September) | 3.25% |
Barclays | Cuts in Q2 | Cuts in Q2 | - |
Standard Chartered | Cuts in Q2 | Cuts in Q2 | - |
UBS Global Research | 2 cuts (April and July) | 1 cut (November) | 3.50% |
