ECB Hikes Deposit Rate Amid Eurozone Inflation Surge

The European Central Bank (ECB) has raised its deposit facility rate to 2.5% from 2.25% in an effort to combat inflationary pressures stemming from the Middle East conflict.

Inflation in the eurozone hit 3.3% in August, with energy costs being nearly entirely responsible for the increase, climbing to 14.3% from 10.3%.

The ECB's main refinancing rate rose to 2.65%, while the marginal lending facility reached 2.9%

The central bank stated that inflation will likely remain above target for an extended period and that it remains well-positioned to handle the uncertainty caused by the conflict.