ECB raises interest rates to fight off inflation jump
Christine Lagarde said the move was unanimous as the ECB lifted inflation forecasts and warned price growth will stay above target for an extended period.
- On Thursday, the European Central Bank raised its key deposit facility rate to 2.5%, marking its second hike since June as it responds to persistent inflationary pressures amid Middle East conflict.
- The eurozone, a net energy importer, has seen inflation exceed the ECB's 2% target since Middle East conflict threatened commodity transit through the Strait of Hormuz, causing oil prices to spike.
- August data revealed eurozone inflation reached 3.3%, with energy inflation surging to 14.3% from 10.3%; core inflation fell to 2.4% from 2.5%, while services inflation dropped to 3% from 3.3%.
- Investors remain divided over the ECB's rate path, with a Deutsche Bank survey showing no consensus about where the central bank's hiking cycle will ultimately sit.
- Economists debate whether this move marks the start of a protracted tightening cycle, while the Federal Reserve, Bank of England, and Bank of Japan prepare for their own rate decisions in coming weeks.
337 Articles
337 Articles
In the face of the energy shock facing the euro area, the European Central Bank once again chooses to raise its rates. In the name of the fight against inflation, is it not making the same mistake as in 2010 and rushing the euro area into turmoil?
The main policy rate is rising to 2.5%. The European Central Bank warns that inflation is expected to remain well above the 2% target for a prolonged periodConfronted with the surge in war-fired energy prices in the Middle East, the European Central Bank (ECB) has raised its rates on Thursday.It also warned that the outlook remains uncertain, thus maintaining the possibility of further tightening.The main policy rate on deposits was raised by a …
The president of the ECB raises the rates to 2.5%, a rise defined as "obvious." Then he passes to the political issues, the hottest ones. The idea of canceling the French debt advanced by the leader of La France Insoumise sounds, and diminishes Bessent's move against the euro, warning him about the boomerang effect for the American economy. On his future instead he does not respond...
The Central Bank has further increased its rates by a quarter of a percentage point on Thursday, as in June. The institution maintains a margin to further tighten credit conditions if the situation continues to deteriorate.
The main reference rate, that of deposits, rose by a quarter of a percentage point, to 2.5%, its highest level since March 2025, at the end of a monetary policy meeting held exceptionally in Berlin. This is the second rate increase this year. "The outlook remains very uncertain, with upward-oriented risks for inflation and downwards for economic growth," the institution said in a statement. The message suggests that the entity does not rule out …
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