ECB Raises Rates as Eurozone Inflation Tops 3%
The European Central Bank (ECB) has raised its deposit facility rate to 2.5% in response to rising eurozone inflation, which is expected to remain above target for an extended period.
The increase marks the second hike since June and brings the main refinancing rate to 2.65%, with the marginal lending facility set at 2.9%. The decision was made despite core inflation, excluding energy costs, falling to 2.4% in August.
The ECB's governing council noted that the conflict in the Middle East continues to generate inflation pressures, and highlighted the importance of monitoring energy prices due to their significant impact on inflation.
The central bank also released revised staff projections, estimating headline inflation to average 3% this year, with expectations for 2027 and 2028 revised up to 2.5% and 2.1%, respectively.