ECB Raises Interest Rates by 25 Basis Points to Combat Inflation

The European Central Bank (ECB) has raised its three key interest rates by 25 basis points in response to inflation pressures caused by the conflict in the Middle East.

The interest rates on the deposit facility, main refinancing operations, and marginal lending facility will be increased to 2.50%, 2.65%, and 2.90% respectively, starting from September 16, 2026.

The ECB has also revised upwards its forecast for euro area economic growth in 2026 and 2027, projecting 0.9% and 1.4% growth rates respectively.

The central bank's baseline projection sees headline inflation averaging 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028, while excluding energy and food, the forecast is for 2.5% in 2026, 2.6% in 2027, and 2.3% in 2028.