FRANKFURT / BERLIN — The European Central Bank raised its key interest rates by 25 basis points on Thursday, lifting the deposit facility rate to 2.50 percent, the second hike this year as energy costs from the Iran war keep inflation elevated, Il Sole 24 Ore reported.
The Governing Council said the Middle East conflict “continues to exert inflationary pressures, which are expected to remain well above target for an extended period,” and framed the move as commitment to bringing inflation back to the 2 percent medium-term goal.
President Christine Lagarde, speaking in Berlin, said the outlook remains highly uncertain, with upside risks to inflation and downside risks to growth from the Middle East war and Russia’s aggression against Ukraine. Staff projections put headline inflation at 3 percent in 2026, 2.5 percent in 2027 and 2.1 percent in 2028.
Lagarde said the economy proved resilient in the second quarter despite the energy shock and that growth appeared to continue into the third quarter. The ECB will stay data-driven and decide meeting by meeting.
Sources: Il Sole 24 Ore, Reuters
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