ECB Raises Interest Rates Again to Combat Inflation Driven by Energy Costs

The European Central Bank (ECB) raised interest rates for the second time this year in an effort to combat rising inflation, which has been driven up by higher energy costs stemming from the ongoing US-Israel conflict with Iran.

Rising oil and natural gas prices have pushed inflation above 3% in the 21-country eurozone, surpassing the previous target of 2%. The ECB also announced its economic growth projection for 2026, which reveals a slight increase of 0.9% compared to 0.8% in June.

The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period, according to the ECB.