ECB Raises Rates by 25 Basis Points to Combat Eurozone Inflation

The European Central Bank (ECB) raised its three key interest rates by 25 basis points on September 10, as eurozone inflation accelerated to 3.3% in August due to surging energy prices.

The deposit rate will increase to 2.50% on September 16, up from 2.25% since June. The main refinancing operations rate will rise to 2.65%, and the marginal lending facility rate will increase to 2.90%. The ECB aims to curb inflation, which has risen above its 2% target.

The institution emphasizes that wages have not shown a significant response to the energy shock at this stage, but expects tensions in the Middle East to continue fueling inflationary pressures.

Inflation excluding energy and food slowed to 2.4%, while energy prices rose by 14.3% year-on-year compared to 10.3% the previous month. The ECB's new projections anticipate average inflation of 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028.