ECB Hikes Rates as Euro Area GDP Growth Forecast Rises

The European Central Bank (ECB) has raised interest rates by 25 basis points to 2.50%, effective September 16, as part of its latest monetary policy decision.

In a set of macroeconomic projections released alongside the rate hike, the ECB forecasts real GDP growth of 0.9% in 2026, a modest upward revision of 0.1 percentage points from June's projection.

The baseline forecast expects growth to accelerate to 1.4% in 2027 and 1.5% in 2028, driven by stronger domestic demand and a resilient labor market.