ECB Hikes Rates Again to Tame Eurozone Inflation

The European Central Bank (ECB) has raised interest rates for the second time this year to combat rising inflation in the eurozone.

The hike, which brings the benchmark deposit rate to 2.5%, is a widely anticipated move aimed at taming an inflation surge driven by higher energy costs from the Iran war.

Surging oil and natural gas prices have pushed inflation above 3% across the 21-country eurozone in August, exceeding the ECB's 2% target.

The ECB has also lifted its 2026 economic growth projection to 0.9% from 0.8% seen in June, while expecting inflation to average 3% this year and 2.5% next year.