J.P. Morgan, Morgan Stanley and Barclays expect the European Central Bank to hike interest rates in 2026, a sharp shift from their previous forecasts for rates to remain on hold, as policymakers flagged rising inflation risks from the Middle East war. Barclays and J.P. Morgan expect a rate hike in the ECB's April policy meeting, followed by further increases in June and July, respectively. Morgan Stanley expects 25-basis-point hikes each in June and September.