ECB Hikes Rates as Eurozone Inflation Hits 3.3% Amid Energy Price Surge

The European Central Bank (ECB) has raised its three key interest rates by 25 basis points, marking the second hike of 2026. The decision was made to combat eurozone inflation, which climbed to 3.3% in August.

The Governing Council's move takes the main refinancing rate to 2.65%, and the marginal lending facility to 2.90%. This follows a hold on July 23rd and a hike on June 11th, reversing part of the easing cycle that preceded the Middle East war.

According to Eurostat's flash estimate, euro area inflation accelerated to 3.3% in August, with energy prices leading the increase at 14.3%. Inflation excluding energy held steady at 2.2%, while services eased to 3.0%. The ECB is tightening against a supply shock it did not create and cannot offset.

ING's Carsten Brzeski frames the September move as an insurance hike, intended to pre-empt second-round effects and protect credibility. He doubts the council will go much further, citing public finance woes and surging bond yields across Europe.