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10.09.202612:19:12UTC+00ECB Raises Rates as Expected as Inflation Risks Mount

The European Central Bank raised its key interest rates by 25 basis points at its September 2026 meeting, its second increase since the outbreak of the US–Iran war. The ECB stated that the conflict in the Middle East continues to generate inflationary pressures, and it expects inflation to remain well above its 2% target for an extended period.

The main refinancing rate was lifted to 2.65%, and the deposit facility rate to 2.50%. The ECB left its 2026 inflation forecast unchanged at 3.0%, but revised its projections upward for 2027 and 2028, to 2.5% and 2.1%, respectively.

Growth forecasts were upgraded to 0.9% for 2026 and 1.4% for 2027, reflecting stronger-than-expected resilience in the euro area economy, while the 2028 growth outlook was kept unchanged at 1.5%. Investors now await President Christine Lagarde’s press conference for further guidance on the future trajectory of monetary policy.

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