European Central Bank Raises Rates in Bid to Quell Inflation

Live updates

1. 4d ago

   ECB Lifts Interest Rates to 2.5% to Combat Inflation

   The European Central Bank raised interest rates by a quarter point to 2.5% to address energy-fueled inflation. The bank warned of upside risks and is preparing for inflation that may be longer-lasting. Following the expected move, the euro slipped while the dollar gained. ECB governors and officials expect further tightening, with October identified as a potential date for the next hike. The Bundesbank chief stated that future rate increases remain very much dependent on energy costs.

   Why it matters

   The ECB uses interest rate adjustments to stabilize prices across the eurozone. Persistent inflation driven by energy costs forces the bank to balance price stability against economic growth. This tightening cycle mirrors global efforts to curb rising costs.

   What is confirmed

   • The European Central Bank raised interest rates to 2.5%.
   • The rate increase was a quarter point.
   • ECB officials expect further rate hikes.
   • The euro declined and the dollar rose following the rate decision.
   • The ECB warned of upside risk to inflation.

   Still unconfirmed

   • The next rate hike may occur in October.
   • Further rate hikes are very much dependent on energy costs, according to the Bundesbank chief.

   What to watch next

   • Energy cost fluctuations
   • The ECB October policy meeting
   • Official inflation data reports
   Sources used for this update (12)

   1. CNBC — An ECB rate hike is ‘all but certain’ — but investors divided on what comes next
   2. The New York Times — European Central Bank Raises Rates in Bid to Quell Inflation
   3. WSJ — The ECB Just Raised Interest Rates. Here’s What to Know.
   4. Financial Times — ECB rate decision live: central bank warns of ‘upside risk’ to inflation as it raises rates
   5. Reuters — Dollar gains, euro slips after expected ECB rate increase
   6. Barron's — The ECB is Tightening, But Don’t Bet the Bank on a Warsh Fed Rate Hike
   7. Bloomberg.com — ECB Officials Expect Further Rate Hikes with October in Play
   8. Financial Times — ECB prepares for ‘longer-lasting’ inflation as it lifts interest rates to 2.5%
   9. Axios — Inflation pressures build
   10. Reuters — ECB governors see more tightening ahead with October in play
   11. AP News — European Central Bank raises interest rates a quarter point to quell energy-fueled inflation
   12. CNBC — Further European rate hikes 'very much dependent' on energy costs, Bundesbank chief said
   confidence 95%