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On May 9, 2025, lights were projected on the Grossmarkthalle building at the headquarters of the European Central Bank in Frankfurt, Germany, to commemorate the 75th anniversary of the Schumann Declaration.
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Investors are preparing for the last interest rate decision in 2025, with four European central banks set to announce their monetary policy and macroeconomic outlook on Thursday.
The European Central Bank, Bank of England, Riksbank and Norges Bank are all meeting, but only one of them is expected to change interest rates.
Here’s what we can expect:
European Central Bank
The European Central Bank is expected to keep interest rates unchanged, with recent economic data not suggesting an adjustment.
But investors will be wary of any comment on the apparent growing tensions within the Governing Council, with some members such as Isabel Schnabel publicly supporting the market’s view that the next rate hike will be one, while others believe there is still room for a rate cut.
Christian Kopf, head of bond portfolio management at German asset manager Union Investment, told CNBC: “I don’t expect interest rates in the euro zone to change for the time being. If there is a change in 2026, we will probably raise interest rates at the end of 2026 or early 2027.”
The ECB is expected to upgrade its euro zone growth outlook when it releases a new round of staff forecasts and internal economic forecasts.
CNBC will begin reporting on the ECB’s monetary policy decision at 1pm London time, with guests including Lorenzo Codogno, founder of Macro Advisors, and Al Cattermole, fixed income portfolio manager at Mirabaud Asset Management.
norges bank
Norges Bank is widely expected to keep interest rates at 4% on Thursday, with economists saying the next rate cut may not come until the summer of 2026. Norges Bank announced its policy decision at 10am local time (9am London time).
Morten Lund, JPMorgan’s chief economist for Scandinavia, commented that the bank’s guidance on Thursday “should be a counter to rising market expectations” that the bank will cut interest rates in March, which he said is currently viewed as a “coin flip.”
norges bank
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In contrast, JPMorgan expects the next rate cut to take place in June, although Norges Bank is unlikely to specify the timing of the cut.
“Forward guidance should remain vague, stating ‘if the economy develops broadly as currently expected, policy rates will be lowered further in the coming year.’ We also think the governor will say that inflation remains too high and repeat ‘we are in no rush to lower policy rates,'” Lund added.
CNBC will interview Norges Bank Governor Ida Wolden Bache at 12:10 pm London time (1:10 pm CET).
Riksbank
The Riksbank is expected to keep its key policy rate unchanged at 1.75% when announcing its decision at 9.30am CET (8.30am London time).
Franziska Fischer of investment bank UBS said nothing will change in the coming quarters either, saying the Riksbank’s easing cycle is over.
The Swedish flag flies over the country’s central bank.
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“The Riksbank cut the policy rate by 25 basis points in September but left it unchanged in November, while signaling that the policy rate may remain unchanged ‘for some time to come,'” Fischer said.
He added that UBS does not believe developments since November require a change in the interest rate outlook.
CNBC will interview Riksbank Governor Erik Thedeen on Thursday at 1:20 pm CET (12:20 pm London time).
bank of england
The Bank of England is the only central bank expected to cut interest rates on Thursday, with a minority of the bank’s nine-member Monetary Policy Committee (MPC) expected to opt for a 25 basis point cut, taking the benchmark rate to 3.75%.
Rate cut expectations rise after latest inflation data It fell sharply to 3.2% in Novemberas well as recent downbeat economic data from the UK, ranging from bleak growth numbers arrive unemployment rate rises.
A decorated Christmas tree outside the Royal Exchange near the Bank of England (BOE) in London, England, Monday, December 16, 2024. The Bank of England is expected to keep interest rates unchanged at 4.75% at Thursday’s meeting and maintain its guidance that “a gradual lifting of policy restrictions remains appropriate.” Photographer: Jason Alden/Bloomberg via Getty Images
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Although inflation remains above the central bank’s 2% target, the downward trend gives the central bank room to lower interest rates to stimulate the economy, consumption and borrowing.
government Last month’s autumn budget The policy is also seen as having an inflationary effect as it includes measures to lower energy bills, freeze fuel taxes and train fares.
CNBC’s “Decision Time” program will broadcast the Bank of England’s decision live at 12 noon London time. Karen Tso will join the studio Jack Mining, chief UK economist at Barclays, explains the impact of this decision on the economy, markets and consumers.
