ECB Rate Hike – the First Since 2023 but Widely Anticipated by Markets
June 11, 2026
The European Central Bank’s trio of key rates were lifted by an as-expected 25 basis points to a 2.25% deposit rate, a 2.40% refinancing rate, and 2.65% on the marginal lending facility rate. A statement announcing these changes explains
The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area. Interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission.
The quarterly revision of macroeconomic projections at the ECB revised CPI inflation in 2026 and 2027 upward to 3.6% and 2.3%, both above the 2.0% target, and penciled in a 2.2% core CPI forecast as late as 2028. GDP is now expected to expand more softly, just 0.8% this year and then 1.2% in 2023. President Lagarde’s post-decision press conference predicts continuing softening of the labor market and warns of the risk of energy price pass-through into the service sector.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: European Central Bank
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