European Economic Outlook 2026-27

This UBS European Economics Presentation (22 September 2026) sets out UBS forecasts for the European and global economy over 2026-27 (extending to 2028). Eurozone GDP growth is expected to slow to 0.8% in 2026 from 1.3% in 2025, then recover to 1.2% in 2027. Euro area inflation (HICP) was 3.2% in August and is forecast at 2.9% in 2026 and 2.7% in 2027, peaking around 3.6% in January 2027 and staying above the 2% target until early 2028. On monetary policy, the ECB is expected to hike one more 25bps to 2.75% in December 2026, then cut back to 2.5% in Q4-27; the Fed is seen hiking once more in December 2026 to 4.0-4.25% before one cut in June 2027;