ECB to Hike Rates Twice This Year, Cut Deposit Rate to 2% in H1 2027, Says Apobank

According to Apobank economist Björn Oll, the European Central Bank is expected to raise rates by 25 basis points this week and again in September, bringing the deposit rate to 2.5%. The forecast reflects deteriorating inflation outlook in the eurozone following geopolitical tensions and energy price increases.

Apobank anticipates these 2026 hikes will be reversed in the first half of 2027, when the deposit rate is projected to be cut in two steps from 2.5% to 2%, assuming geopolitical tensions ease and inflation returns to the ECB's 2% target.