ECB Set to Raise Rates to 2.50% as Eurozone Inflation Hits 3.3%
Updated
Updated · Euronews · Sep 2
ECB Set to Raise Rates to 2.50% as Eurozone Inflation Hits 3.3%
3 articles · Updated · Euronews · Sep 2
Summary
Markets are pricing in a 25-basis-point ECB hike on Sept. 10, which would lift the deposit rate to 2.50% from 2.25% after August eurozone inflation accelerated to 3.3% from 2.9%.
ECB economists said the latest price surge is overwhelmingly an energy shock, with adverse supply factors accounting for about 90% of the rise in energy inflation between January and May 2026.
The bank argues this episode differs from the 2021-22 inflation wave because demand and fiscal stimulus are playing only minor roles, making the policy response more gradual than the forceful tightening seen then.
That shock has been tied partly to the Middle East war and the closure of the Strait of Hormuz; the ECB waited until June 11 to deliver its first rate increase in three years, from 2.0% to 2.25%.
Even under the ECB's earlier optimistic scenario, inflation was not expected to return to the 2% target before 2027, and the persistence of the war now points to a longer fight to restore price stability.