The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term. In line with this commitment, it today decided to raise the three key ECB interest rates by 25 basis points. The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area. In the baseline of the new Eurosystem staff projections, headline inflation is expected to average 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028. For ... (full story)

The European Central Bank has lifted its deposit facility rate by 0.25% to 2.25%, marking a decisive pivot back to tightening as the Iran war pushes eurozone inflation to its highest level in nearly three years. The European Central Bank has raised interest rates for the first time in nearly three years, lifting its deposit facility rate from 2% to 2.25% following its governing council meeting on Thursday. The ECB sets monetary policy for the eurozone through three key interest rates, with the deposit facility rate serving as its main policy benchmark. The ECB’s deposit facility rate was last raised in September ... (full story)