So we've had a double-header in December with both the ECB and the big Bank of England policy decision on the same day.

Starting with the Bank of England, they cut rates to 3.75% as expected.

However, it was more of a hawkish cut than many were looking for, with four of the nine MPC members choosing to keep rates at 4%.

The statement also highlighted that further reductions in the policy rate from here would likely be a closer call. So very much a hawkish cut for the Bank of England in December.

But that said, we see more rate cuts in 2026 on the back of contracting GDP in September/October and inflation falling fast.

Turning now to the ECB, a very different policy outcome, with them keeping rates on hold at a much lower 2% and not giving much away in terms of where next for policy rates.

That said, what we did learn at the ECB's December policy meeting was an update of their forecast out to 2028.

And here we had a very interesting path for inflation that shows a prolonged, albeit small, undershoot for inflation in both 2026 and 2027.

And we think it might be quite a challenge for the ECB to keep inflation expectations anchored with rates on hold at 2%.

And for that reason, we expect to see one small adjustment down in rates to 1.75% sometime in this first half of 2026, and for rates to stay at that level before rising again in 2027.