European Central Bank Increases Key Interest Rate Amid Inflation Concerns

The European Central Bank has raised its main deposit rate by 25 basis points to 2.25%, marking its first rate hike since 2023. This decision aims to combat persistent inflationary pressures, which are partly attributed to the conflict in Iran and disruptions in the Strait of Hormuz. ECB President Lagarde indicated a hawkish stance, suggesting that eurozone economic growth is not significantly threatened despite these measures.