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The European Central Bank raised interest rates today, Thursday, by a quarter of a percentage point, bringing the deposit rate to 2.5 percent, as the energy shock resulting from the Iran war pushes Eurozone inflation higher and necessitates a second increase in three months.
The European Central Bank sets monetary policy in the Eurozone through three key interest rates, with the deposit facility rate serving as the primary indicator of its policy.
The main refinancing rate was raised to 2.65 percent, and the marginal lending facility rate to 2.9 percent.
In its statement, reported by the European network Euronews, the Central Bank indicated that "the conflict in the Middle East continues to generate inflationary pressures, and inflation is likely to remain well above the target level for an extended period," while confirming at the same time that "today's decision puts the Governing Council in a good position to deal with the uncertainty caused by the conflict."
The decision followed an August inflation reading of 3.3 percent, up from 2.9 percent in July, the highest level since September 2023.
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