ECB Hikes Deposit Rate Amid Eurozone Energy Price Surge

The European Central Bank (ECB) has raised its key deposit rate by 0.25 percentage points, from 2.25% to 2.50%, in response to energy-driven inflation pressure across the eurozone.

The increase takes effect on September 16 and is the second this year. The ECB noted that eurozone inflation had climbed above 3%, well beyond its 2% target.

The central bank warned that a prolonged period of expensive energy could feed through to prices across a wider range of goods and services.

Markets anticipate further increases, with money markets pricing in about 0.60 percentage points of additional increases by April 2027.