ECB to start lifting rates as soon as April on inflation pressures, brokerages say

(Corrects paragraph 2 to say that Barclays and J.P. Morgan expect a second ​rate hike in June ‌and July, respectively, not rate hikes in June and July)

March 20 (Reuters) – J.P. Morgan, Morgan Stanley and Barclays ‌expect ​the European Central ⁠Bank to hike ⁠interest rates in 2026, a sharp shift from their previous forecasts for rates to remain ​on hold, as policymakers flagged rising inflation risks from ⁠the Middle East ⁠war.

Barclays and J.P. Morgan ​expect a rate hike in the ​ECB’s April policy meeting, followed ‌by further increases in June and July, respectively.

Morgan Stanley expects 25-basis-point hikes each in June ⁠and September.

The sudden shift comes after the ECB kept its key interest ⁠rate ‌steady at 2% on ⁠Thursday, but policymakers expect ​to ‌discuss hikes in the ​coming months ⁠as the Iran war threatens to push up inflation in the euro zone.

(Reporting by Siddarth S in Bengaluru; Editing by ​Sonia Cheema)