by Kanchana Chakravarty and Siddarth S

(Reuters) -The large international brokers expect the European Central Bank (ECB) to maintain its interest rates that are unchanged longer, until 2026, and some even predict that the next measure will be an increase, after the monetary institute announced Thursday a second consecutive break and presented optimistic prospects for growth and inflation.

The ECB, as expected, left its key rates on Thursday at 2%, but has given no indication of its next decision.

“We continue to be in a good position,” said the president of the ECB, Christine Lagarde, at the press conference which followed the institution’s decision, adding that inflation was at the target level and that the economy remained solid.

These observations led UBS to abandon his forecast of a drop in rates in December, the broker now expecting the ECB to maintain his unchanged interest rate for an “prolonged period”.

He thus joins Goldman Sachs, who does not provide any drop in rates this year.

The operators assess at 84% the probability that the central bank maintains its unchanged rates until the end of 2025, according to LSEG data.

JP Morgan postponed from October to December its forecast for a decrease of 25 base points, while Barclays, Morgan Stanley and Wells Fargo reiterated their expectations of a quarter of a quarter in December.

Christine Lagarde said that the risks for the economy were “more balanced” than in June, but that the inflation prospects were exceptionally uncertain.

“We recognize the obvious risk that the ECB has finished with the reductions, but we also want to recognize that inflation prospects always involve a softening bias,” write JP Morgan analysts in a note.

For their part, TD Securities, as well as Deutsche Bank and BNP Paribas, expect the ECB noting its interest rates in 2026 after having maintained them unchanged until the end of the year.

(Written by Kanchana Chakravarty in Bangalore; Diana Mandia, edited by Blandine Hénault)

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