ECB Hikes Rates Again Amid Energy Price Surge

The European Central Bank (ECB) raised its three key interest rates by 25 basis points in September, taking the deposit facility rate to 2.50%. The move was prompted by a surge in energy prices, which pushed euro area inflation higher.

Energy prices rose 14.3% year over year in August, the fastest increase among the main inflation components. This led to an annual inflation rate of 3.2% in August, up from 2.9% in July.

The ECB's decision was its latest effort to deal with the shock to inflation caused by the Middle East conflict and rising energy prices. The central bank stated that inflation will likely remain above its 2% target for an 'extended period.'