ECB Raises Rates by 25 Basis Points
On June 11, the ECB also raised all three key interest rates by 25 basis points. The decision was made against the backdrop of accelerating inflation and risks associated with the conflict in the Middle East.
Consensus
- The European Central Bank raised three key interest rates by 25 basis points.
- The rate on deposits was increased to 2.5% annually.
- The main refinancing operations (MRO) rate was raised to 2.65%.
- The marginal lending facility rate was increased to 2.9%.
- The Middle East conflict continues to exert inflationary pressure.
- Inflation is expected to remain significantly above the 2% target for an extended period.
- The ECB's decision is aimed at stabilizing inflation at the 2% target in the medium term.
- The rate hike is the second in a row and the first since September 2023.
- The decision was made due to accelerating inflation and risks linked to the Middle East conflict.
Points of divergence
- The ECB's baseline forecast projects average inflation of 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028. — vedomosti
- The ECB forecasts inflation of 3% for the year, with growth of 0.9% in 2026, 1.4% in 2027, and 1.5% in 2028. — kommersant
- The decision was made on June 11, and the rate increase is the first since 2023. — vedomosti
- The rate increase is effective from September 16. — kommersant
- Isabel Schnabel, a member of the ECB's executive board, stated that monetary policy must be tightened if the energy shock from the Middle East conflict expands. — vedomosti
Coverage (2 sources)
- ECB raised key interest rates by 25 basis points — Ведомости
- ECB raises interest rates again by 25 basis points — Коммерсантъ