ECB Raises Interest Rates to Combat Inflation Linked to Iran Conflict

The European Central Bank (ECB) has raised interest rates for the second time this year to combat inflation caused by rising energy costs. The increase is aimed at curbing inflation that has exceeded the ECB's target of two percent, with prices in the eurozone rising above three percent last month.

The sharp rise in oil and natural gas prices due to American aggression on Iran has led to higher inflation rates. The ECB has expressed concerns about the outlook, stating that it remains highly uncertain, with risks of rising inflation and declining economic growth.

In a statement after its meeting in Berlin, the ECB also raised its economic growth forecasts for 2026 to 0.9 percent from 0.8 percent expected last June. Inflation is likely to average three percent this year and 2.5 percent in 2027.