The European Central Bank raised its three key interest rates by 25 basis points as the conflict in the Middle East continues to generate inflation pressures. Effective Sept. 16, 2026, the deposit facility rate will rise to 2.50%, the main refinancing operations rate to 2.65% and the marginal lending facility rate to 2.90%. The Governing Council expects inflation to remain well above its 2% target for an extended period. New staff projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, with the latter two forecasts revised upward from June. Economic growth is projected at 0.9%, 1.4% and 1.5%, respectively, including upgrades for 2026 and 2027. Risks remain tilted to the upside for inflation and the downside for growth, and the Governing Council will continue to set rates meeting by meeting without committing to a particular path. The asset purchase programme and pandemic emergency purchase programme portfolios will continue to decline as maturing principal is no longer reinvested.
2026-09-10European Central Bank
European Central Bank raises key interest rates by 25 basis points as inflation pressures persist
The European Central Bank raised its three key interest rates by 25 basis points, taking the deposit facility rate to 2.50% from Sept. 16, 2026. Middle East conflict-related pressures are expected to keep inflation above target, with headline inflation projected at 3.0% in 2026 and 2.5% in 2027. Future decisions will remain data dependent and meeting by meeting.