ECB raises interest rates to fight off inflation jump
- 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.
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320 Articles
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 …
The European Central Bank is raising interest rates again. The key rate is going from 2.25 to 2.50 percent. For Dutch savers, that sounds like good news: if banks can receive more interest, a higher return on savings accounts is to be expected. But whoever now the app from ING, Rabobank...
In September, the ECB raises the key interest rate. This affects the room for manoeuvre of banks - and savers.
In September, the ECB raises the key interest rate. This affects the room for manoeuvre of banks - and savers.
The European Central Bank (ECB) increased the three representative interest rates for the second time this year by 25 basis points on Thursday, and warned that the Middle East war continues to fuel inflationary pressures. The decision comes at a time when energy prices rise sharply, Brent oil exceeds $105 per barrel, and European governments' borrowing costs have risen to levels that have not been met for many years.
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