Published by Global Banking & Finance Review®
Posted on December 9, 2024
2 min readLast updated: January 27, 2026
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Major brokerages expect the ECB to cut interest rates by 25bps in December, with further cuts anticipated in 2025.
(Reuters) - Major brokerages including Goldman Sachs, Morgan Stanley and Barclays expect the European Central bank to cut interest rates by 25 basis points at its Dec. 12 meeting, rather than a larger 50-bp move, as inflation gradually heads down.
Forecasters at financial institutions also see further rate cuts in 2025. Some predict substantial cuts, taking the ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB's benchmark rate below the 2%-2.5% range economists view as neutral, meaning it neither stimulates nor restricts the economy, while others expect the ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB to pause around that neutral level.
Money markets price in roughly 150 bps of ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB cuts by the end of 2025.
A sharp slowdown in the bloc's business activity in November after its dominant services industry contracted and manufacturing sank deeper into recession, sparked talk of a bigger half a percentage point cut in December.
Forecasts of major brokerages before the December policy meeting:
Brokerage Dec'24 2025 Terminal
rate cut forecast rate/end '25
forecast (bps) forecast
(bps)
BofA Global 25 150 1.50%
Research
Goldman Sachs 25 125 1.75%
(July'25)
ING 25 125 1.75%
J.P.Morgan 50 100 1.75%
Citigroup 25 150 1.5%
(September'2
5)
Peel Hunt 25 100 2.00%
Barclays 25 150 1.5%
Societe 25 75 2.25%
Generale (April'25)
UBS Global 25 100 2.00%
Research (June'25)
TD Securities 25 100 2.00%
(June'25)
Erste Group 25 100 2.00%
Nomura 25 125 1.75%
Morgan Stanley 25 1.25%
Deutsche Bank 25 150 1.50%
Santander 25 100 2.00%
(June '25)
(Compiled by Broker Research team in Bengaluru; Editing by Alun John and Amanda Cooper)
The article discusses predictions by major brokerages that the ECB will cut interest rates by 25 basis points in December.
Forecasters anticipate further rate cuts in 2025, with some predicting substantial reductions.
Money markets price in approximately 150 basis points of ECB cuts by the end of 2025.
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