ECB Hikes Interest Rates Again as Inflation Remains High

The European Central Bank (ECB) has raised its key interest rates for the second time this year, increasing them by 25 basis points. The decision was in line with analysts' expectations.

The new interest rates will take effect from September 16th: the deposit rate will be 2.50%, the main refinancing operations rate will be 2.65%, and the marginal lending rate will be 2.90%.

The ECB has left its inflation forecast for this year unchanged at 3%, but revised its forecasts for 2027 and 2028 upwards to 2.5% and 2.1% respectively. The regulator also raised its forecast for eurozone GDP growth in 2026 to 0.9%

The ECB notes that the outlook remains highly uncertain, with risks of rising inflation and a slowdown in economic growth. The regulator is concerned about the energy shock's impact on the economy, but acknowledges that the region's economy has proven more resilient than expected.