The ECB has raised interest rates for the first time since 2023

The European Central Bank (ECB) has raised its key policy rate for the first time in almost three years. This is stated in a press release on the regulator’s website.

The deposit rate has risen by 25 basis points and will stand at 2.25% from 17 June. This is the first increase since September 2023.

The rate on main refinancing operations has risen to 2.4%, and the rate on marginal lending to 2.65%.

“The war in the Middle East is creating inflationary pressures, and the decision to raise rates is justified under a range of scenarios reflecting how the shock may unfold and affect the euro area’s medium-term outlook,” the regulator’s statement reads.

At the same time, the ECB raised its inflation forecast for 2026 to 3%, compared with 2.6% in the previous March review. Expectations for 2027 stand at 2.3%, and for 2028 at 2%.

The European Central Bank also lowered its forecast for eurozone economic growth this year by 0.1 percentage points, to 0.8%.

As noted, the outlook remains uncertain, with risks of rising inflation and slowing economic growth. The full impact of the war will depend on the intensity and duration of the energy price shock, as well as the scale of its indirect and secondary effects.

It should be recalled that annual inflation in the eurozone accelerated to 3.2% in May 2026, up from 3% in April, according to preliminary Eurostat data.

As reported by the GMK Center, EU GDP grew by 1.6% year-on-year in 2025, whilst the eurozone economy grew by 1.5%. In the fourth quarter of 2025, GDP rose by 1.4% year-on-year in the EU and by 1.3% year-on-year in the eurozone.