ECB Raises Interest Rate to 2.50% Amid Energy Inflation Threat

The European Central Bank (ECB) has raised its key policy rate to 2.50%, a 25-basis-point increase from 2.25%, in response to renewed energy inflation threats that may delay price stability.

Eurozone inflation has accelerated, with energy prices being a major source of pressure, and the ECB now expects 2026 eurozone inflation of around 3%.

The central bank's latest projections put 2026 GDP growth at 0.9%, reflecting relatively resilient economic activity despite the energy shock.