ECB hikes interest rates for first time since 2023 as Iran war ramps-up energy costs
The bank also lifted its inflation outlook and trimmed growth forecasts as oil disruptions pushed eurozone prices above target.
- The European Central Bank raised its benchmark rate to 2.25% from 2% on Thursday, becoming the first major central bank to hike rates in response to inflation pressures tied to the Iran war and higher oil prices.
- Inflation in the 21 euro-area countries climbed to 3.2% in May, exceeding the ECB's 2% target, while international benchmark Brent crude surged to just below $92 per barrel from around $73 following Iran's choking off oil flows through the Strait of Hormuz.
- Carsten Brzeski, global chief of macro at ING, noted that "the pass-through of higher energy and input prices to final consumption will be limited" due to consumers' lack of willingness to pay higher prices.
- Contrasting with the ECB's move, the Federal Reserve is expected to keep its key interest rate unchanged when it meets next week under Federal Reserve Chair Kevin Warsh, appointed earlier this year by President Donald Trump.
- Central banks in Australia and the Philippines have already raised rates since the start of the Iran war, signaling a broader global shift as policymakers wrestle with inflation fed by sharply higher oil prices.
234 Articles
234 Articles
To what extent has the European Central Bank raised its deposit rate? The European Central Bank has decided to raise interest rates after a lengthy pause. This move was a response to the rapid rise in prices triggered by the outbreak of a major war in Iran, RBC-Ukraine reports, citing Deutsche Welle. The Frankfurt-based regulator raised its base deposit rate by 0.25 percentage points, now standing at 2.25%, a historic moment for the market. The …
ECB raises interest rates as inflation bites
The European Central Bank raised interest rates on Thursday, becoming the first of the world’s major developed economies to do so since the outset of the Iran war. Frankfurt cited “a broadening of inflation throughout the economy.” A spike in US inflation is also putting pressure on the Federal Reserve — and its new chair — to hike the cost of borrowing this year. Policymakers worldwide are in a bind: The World Bank projected Thursday that the I…
The European Central Bank (ECB) has raised its rates for the first time since 2023. Christine Lagarde rejects criticism and considers this decision "necessary" in the face of uncertaintyThe European Central Bank (ECB) has raised its rates on Thursday, noting that it does not intend to tolerate long-term inflation fuelled by the conflict in the Middle East.The Frankfurt Institute has at the same time judged growth in the euro area to be resilient…
Wall Street rides tech rebound, Europe steady after ECB rate hike
The European Central Bank (ECB) has raised the deposit rate from 2 percent to 2.25 percent due to rising inflationary pressure. This is no surprise, but it is exceptional, as the last time this happened was three years ago. The increase primarily affects savings. "Although that is also relative," says HLN money expert Pascal Paepen.
The European Central Bank (ECB), the body responsible for managing the monetary policy of the European Union (EU), raised its interest rates to 2.25%, with the aim of counteracting the rise in inflation caused by the war in the Middle East. It is the first time that the ECB has raised its main rate since the conflict began. To date, it stood at 2%. "The Governing Council has committed itself to defining monetary policy so that inflation stabiliz…
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