ECB Expected to Raise Interest Rates Later Today
Markets are pricing three more hikes this year as policymakers weigh second-round inflation risks and weaker growth forecasts.
- On Thursday, the European Central Bank is expected to hike its key deposit rate by 25 basis points to 2.25%, marking its first increase since 2023 as policymakers address second-round inflation effects.
- The ECB maintains a single mandate to keep inflation near 2%, yet cost of living runs at 3.2% across the 21 countries using the euro, driven by higher energy costs from the Middle East conflict.
- Energy prices soared 10.9% year-on-year, pushing headline inflation higher, while core inflation reached 2.5% in April driven by rising services costs and the energy price index up about 12% since March.
- This decision will quickly result in higher repayments for Ireland's 110,000 tracker mortgage customers, with a 0.25% increase adding €37 per month to a €300,000 mortgage over 25 years.
- Goldman Sachs chief European economist Sven Jari Stehn wrote that ECB staff will likely mark down growth projections for 2026-27, while the Governing Council worries tighter policy could push the euro zone toward recession.
11 Articles
11 Articles
The Governing Council of the European Central Bank (ECB) is having difficulty taking this step because of the weakness of European economic growth and particularly German economic growth . Within it there is already consensus, however, that the time has come to do so. No one wants to make the same mistake as in the previous crisis . This Thursday the first increase in interest rates is expected in almost three years and the financial markets hav…
DECRYPTAGE - The crisis in the Middle East has changed the situation. Does the institution, however, open a new cycle of rise? Verdict, this Thursday afternoon, at the end of the Governing Council meeting.
This Thursday’s meeting of the European Central Bank (ECB) is emerging as one of the most important in recent years. Unless last-minute surprise, the institution chaired by Christine Lagarde will approve the first increase in interest rates since 2025 and the first impact is being seen in the eurobor. The main indicator of variable mortgages accumulates three consecutive months of increases and has closed May at 2.804%, its highest level in 20 m…
It is a countdown for the European Central Bank (ECB) meeting, which is likely to implement the first increase in official interest rates in almost three years - its reference rate is 2.25% - and in which it will present its new economic prospects. The agency has more detailed information on the impact of the war in the Middle East on the economy of the euro area. Activity in the region contracted 0.2% between January and March in its first setb…
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