European Central Bank Raises Key Interest Rates by 25 Basis Points Amid Persistent Inflation Pressures

The European Central Bank's Governing Council decided to raise its three key interest rates by 25 basis points, with the deposit facility rate increasing to 2.50%, effective September 16, 2026. This decision was driven by persistent inflation pressures, exacerbated by the conflict in the Middle East, and the euro area economy's greater-than-expected resilience. The ECB also revised its inflation and economic growth projections upwards for 2027 and 2028.