ECB raises rate to 2.5%

The European Central Bank raised its three official interest rates by 25 basis points, taking the deposit rate to 2.5%. It was the second increase this year. The bank linked the move to energy-driven inflation pressures from the Middle East conflict and raised parts of its inflation outlook.

• 25 basis pointsSize of the rate increase — Applied to all official rates
• 2.5%New ECB deposit rate — Rate paid on bank deposits
• 2.65%New refinancing operation rate — ECB short-term bank lending
• 2.90%New marginal lending rate — ECB overnight borrowing facility

Q1

Which ECB rate is now 2.5%?

It is the deposit rate, paid on banks’ excess funds held at the ECB; all three official rates increased together.

Q2

Why did the ECB tighten policy?

The ECB linked persistent price pressure to energy costs from the Middle East conflict and warned inflation would remain above target longer.

Q3

What forecasts accompanied the decision?

The new outlook kept this year’s inflation forecast unchanged, raised projections for the following two years, and lifted growth expectations.

Q4

How did the other rates change?

The refinancing and marginal-lending rates rose alongside the deposit rate, changing the ECB’s terms for banks’ short-term funding.

• La Razon
• Europa Press
• El Mundo
• El Universal
• eleconomista.com.mx
• Deutsche Welle
• La Tercera
• Diario Libre