Europe Economic Weekly

Research evidence excerpt

Europe Economic Weekly

Global Markets Research

26 June 2026Europe Economic Weekly

Economics - EMEA/Euro Area/Europe

Research Analysts

Sintra stage European Economics

George Buckley - NIplc

• We removed one 25bp hike from our ECB view this week and now expect hikes in george.buckley@nomura.com

September and December 2026 (but no longer in March 2027). +44 (0) 20 7102 1800

Andrzej Szczepaniak - NIplc • UK surveys show softer prices and activity in June, supporting the case for no rate andrzej.szczepaniak@nomura.com

hikes (markets: 1 x 25bp). Our poll sees Burnham appointing a soft-left Chancellor. +44 (0) 20 7102 3167

Josie Anderson - NIplc

Week in review josie.anderson@nomura.com

We removed one 25bp hike from our ECB view this week and now expect hikes in +44 (0) 20 7102 4284

September and December 2026 (but no longer in March 2027). The key reason is the

improved situation in the Middle East. With two more hikes to 2.75%, we remain more

hawkish than market pricing. However, ECBspeak this week highlighted policymakers'

concerns about broadening inflation pressures, which we expect to continue at the ECB's

Sintra forum. Price expectations’ surveys softened but remained elevated.

This week’s PMI, CBI and YouGov/Citigroup surveys revealed a combination of weaker

price pressures and activity. Markets are only pricing one hike from the BoE by next

spring, and we think the Bank will remain on hold. Likely incoming PM Burnham will want

to do something to improve UK’s growth outlook, but he will be well aware that gilts

markets could punish a decision to loosen the fiscal rules. Our poll shows a plurality

expecting the announcement of a soft-left Chancellor and a rise in gilt yields.

Data preview

We forecast euro area HICP inflation to dip by 0.1pp to 3.1% y-o-y in June.