ECB Hikes Rates Again Amid Eurozone Inflation Surge
The European Central Bank (ECB) has raised interest rates for the second time this year to combat inflation in the eurozone, which has surpassed 3% due to rising energy prices.
According to Deutsche Welle English, the ECB's decision is aimed at curbing inflation fueled by increasing oil and natural gas prices. The inflation rate in the 21 countries of the eurozone exceeds the ECB's previous target of 2%.
The bank also raised its economic growth forecast for 2026 to 0.9%, up from 0.8% expected in June. Average inflation is estimated to be 3% this year, with a projected decrease to 2.5% in 2027.
Sylvain Broyer, S&P's chief economist for Europe, the Middle East, and Africa, noted that the inflation outlook has worsened over the summer, with demand shocks increasingly likely to be added to supply shocks.