ECB expected to cut rates by 25 basis points in July — UBS forecast

Analysts at UBS predict the European Central Bank (ECB) could deliver another rate cut amid global economic uncertainty, with a 25 basis point reduction to 1.75% expected on July 24.

However, ongoing EU-US trade talks could influence this outlook. UBS notes that their forecast may be revised based on positive negotiation outcomes or timeline extensions.

Reuters reports that EU member states could either pursue a quick agreement with the US or leverage their economic influence for more favorable terms. Recently, European Commission President Ursula von der Leyen and Donald Trump held what agency sources described as a "good exchange of views."

Separately, UBS expects the Bank of England to implement two rate cuts totaling 50 basis points this year — an initial reduction to 4.0% on August 7, followed by a cut to 3.75% on November 6. The bank projects UK rates will reach 3.0% by the end of 2026.