ECB Raises Rates as Energy Shock Persists
ECB Governing Council raised key rates by 25 basis points at its September 2026 meeting, citing persistent energy-driven inflation and a resilient euro area economy.
The story in focus
The ECB raised its three key interest rates by 25 basis points at its 9-10 September 2026 meeting, lifting the deposit facility rate to 2.50%. The Governing Council cited persistent inflation pressures from the Middle East energy shock and an inflation outlook that had deteriorated since June.
- The deposit facility rate was increased from 2.25% to 2.50%.
- September staff projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028.
- Euro area growth was projected at 0.9% in 2026, 1.4% in 2027 and 1.5% in 2028.
Rate decision and inflation outlook
The Governing Council agreed to raise the three key ECB interest rates by 25 basis points, according to the account of the meeting held in Berlin on 9-10 September 2026. The deposit facility rate rose from 2.25% to 2.50%. The account, published on 8 October 2026, said the decision was robust across the milder, adverse and severe energy-price scenarios prepared by staff.
The account attributed the decision to persistent inflation pressures linked to the conflict in the Middle East and developments in Russia's war against Ukraine, which had pushed energy prices higher. Eurostat's flash estimate put headline inflation at 3.3% in August, up from 2.9% in July. The September staff projections saw headline inflation averaging 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, with the 2027 and 2028 figures revised up from June.
Growth resilience and risks
The account described the euro area economy as resilient in the second quarter, supported by private consumption, government spending and exports, while investment remained sluggish. Staff projections foresaw growth of 0.9% in 2026, 1.4% in 2027 and 1.5% in 2028, upward revisions for 2026 and 2027.
Members judged risks to inflation as tilted to the upside and risks to growth as tilted to the downside, citing the energy shock and geopolitical uncertainty. The account said the Governing Council would keep a data-dependent, meeting-by-meeting approach without pre-committing to a rate path. It noted that most longer-term inflation expectations remained around 2%.
What did the ECB decide at its September 2026 meeting?
The Governing Council raised the three key ECB interest rates by 25 basis points, lifting the deposit facility rate from 2.25% to 2.50%, citing persistent energy-driven inflation pressures and an inflation outlook that had deteriorated since June.
Sources & further reading
- Meeting of 9-10 September 2026 ↗ecb.europa.eu
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