ECB Boosts Deposit Rate Amid Ongoing Inflation Pressures

The European Central Bank (ECB) has raised its deposit rate by 25 basis points to 2.50%, as expected, in response to continued inflation pressures in the euro area.

In August, the inflation rate rose to 3.3%, mainly due to higher energy prices, while core inflation remained stable at 2.9%.

Energy prices remain a major risk factor for monetary policy, and the ECB will continue to monitor whether the energy price shock has an impact on other prices and wages.

The recent robust economy has made it easier for the ECB to move interest rates, but if inflation does not improve or energy-related price surge spreads, additional interest rate hikes cannot be ruled out.