UBS Gives Outlook for Policy Action at ECB, Central Banks of U.K., Switzerland, Sweden

10:35 AM EDT, 07/07/2025 (MT Newswires) -- Central banks around the world are confronted with major uncertainties around growth and inflation, not least in the context of the United States government's tariff measures -- this also holds for the European Central Bank, Bank of England, Swiss central bank (SNB) and Sweden's Riksbank, said UBS.

"Crunch time" is now approaching for the out-of-consensus call of UBS that the ECB will cut by 25bps to 1.75% on July 24. If there is a benign outcome in the U.S.-European Union trade talks, the bank will abandon its forecast of a July cut, all other things being equal.

UBS thinks the BoE will deliver two more 25bps cuts this year (August and November) and three cuts in 2026, more than currently priced by the markets.

As regards the SNB, following a 25bps cut in June and a far less dovish communication than expected -- including high hurdles for negative rates -- the bank doesn't expect further rate cuts.

UBS has added one more Riksbank cut to its forecast, a 25bps step to 2.0% in August.

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