ECB Hikes Rates Amid Ongoing Inflation Pressures

The European Central Bank (ECB) raised its key interest rate by 0.25 percentage points to 2.50% at its meeting on Thursday, marking the second rate hike in 2026.

The inflation outlook remains unchanged for 2026, but is rising for the next two years, while the growth forecast has also been revised upward.

Markets are now pricing in two more rate hikes in the course of 2026 amid resurging inflation.

In a statement, the ECB said that 'the conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period.'