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Morgan Stanley Previews Thursday's Policy Meeting at Central Bank of U.K., Norway, ECB, Sweden, Czech Republic

BY MT Newswires | ECONOMIC | 12/17/25 12:15 PM EST

12:15 PM EST, 12/17/2025 (MT Newswires) -- Morgan Stanley said it expects the European Central Bank to be on hold on Thursday.

The focus will be on the updated projections and communication around it. The bank estimates the ECB to revise upward its growth forecasts for 2025, 2026 and 2027, and project two years of inflation undershoot in 2026-27 (1.7% year over year) before HICP moves back to target in 2028 (2.0% year over year).

Morgan Stanley sees a 5-to-4 vote for a 25bps rate cut to 3.75% at the Bank of England on Thursday, and unchanged messaging.

Morgan Stanley predicts Sweden's Riksbank to remain on hold on Thursday and to signal the intention to remain at the current policy rate for the foreseeable future.

Morgan Stanley forecasts Norway's Norges Bank to remain on hold on Thursday. Due to domestic developments coming in slightly weaker -- growth and inflation -- the bank foresees the policy rate path to continue signaling a chance of a rate cut in 1Q26.

The overall rate path in the long term is likely to be revised slightly to the upside due to the repricing of policy rates of trading partners.

Morgan Stanley expects the Czech central bank to maintain its cautious stance and stay on hold on Thursday.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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