UBS expects the ECB to deliver a final 25bps hike in December 2026, before then pausing

Sell-side rate forecasts of this kind are a recurring feature of ECB cycles: a house publishes a terminal-call with a named final hike and a subsequent pause, positioning itself relative to consensus and to what OIS pricing already implies. The content here is less the hike itself than the framing of a terminal rate and an extended hold, since a 'final hike' call is implicitly a call on where the easing or holding phase begins, which is what the back end of the curve trades on. Forecasts dated this far out carry low information weight on their own; their practical function is to mark where a major house's economics team sits relative to peers, and revisions tend to cluster, so the tell is whether other houses migrate toward or away from the same terminal and timing over subsequent weeks. A single-hike-then-pause profile also implies a shallow path, which matters for how front-end versus belly positioning expresses the view. As a forecast rather than commentary from the Governing Council, it does not move policy expectations directly; it matters mainly as a data point on the distribution of street views heading into the next round of ECB communication and staff projections.