0517 GMT - Franklin Templeton's base case is for the European Central Bank to deliver one final rate hike in September with inflation expected to remain above the ECB's 2% target over the coming quarters, says David Zahn, head of European fixed income, in a note. Thereafter the ECB is expected to remain on hold to assess the impact of the tightening already delivered. However, the ECB remains highly data-dependent, Zahn says. "If renewed tensions in the Gulf were to push energy prices higher and keep inflation above target for longer, policymakers could be forced to consider additional rate hikes." Franklin Templeton expects the ECB to begin easing policy in 2027. The ECB raised interest rates by 25 basis points in June and is expected to stay on hold this week. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
July 22, 2026 01:17 ET (05:17 GMT)
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