Barclays and Bank of America "surrender", Wall Street no longer expects the ECB to cut interest rates in December

After the European Central Bank kept interest rates unchanged on Thursday, Barclays Bank and Bank of America Global Research revised their forecasts, no longer expecting the ECB to cut rates at the December meeting. As expected, the ECB kept interest rates unchanged at its latest meeting on Thursday. The bank maintained its key deposit rate at 2%, marking the third consecutive meeting without any changes since the last rate cut in June of this year. The ECB stated that with economic risks fading and the Eurozone showing resilience in the face of uncertainties, current policy is in a "good state". Preliminary Eurozone growth data released earlier on Thursday showed a quarter-on-quarter growth of 0.2% in the third quarter, higher than expected, strengthening the expectation that the ECB will keep rates unchanged. The data indicated that despite widespread uncertainty caused by US trade tariffs, the economy remains resilient. The ECB has repeatedly stated that its rate decisions will be made "meeting by meeting, data-dependent" and reiterated this stance on Thursday. However, top ECB officials have indicated earlier this month that the rate cut cycle is nearing its end. Both institutions had previously expected the ECB to cut rates by 25 basis points at the December policy meeting. Barclays now expects the ECB to keep rates unchanged until the end of 2026, while Bank of America expects a rate cut of 25 basis points in March next year. Barclays stated in its report on Thursday: "The ECB has yet to convey any clear signals on whether the current policy stance will be maintained and for how long." Meanwhile, several institutions including Goldman Sachs and UBS Global Wealth Management have reiterated their expectations that the ECB will keep rates unchanged in the foreseeable future. According to LSEG data, the market consensus is that the likelihood of the ECB cutting rates in December this year is extremely low, almost zero.