Overview
- The ECB’s Governing Council raised its three key rates by 0.25 percentage point on Thursday, June 11, 2026, bringing the deposit rate to 2.25% in a unanimous decision announced by President Christine Lagarde.
- Eurozone headline inflation rose to 3.2% in May and core inflation climbed to 2.5%, figures the ECB cited as driven largely by higher energy costs linked to the war in the Middle East and disruptions to oil routes.
- The bank revised its forecasts higher for inflation — to about 3.0% in 2026 and 2.3% in 2027 — and trimmed 2026 growth to roughly 0.8%, reflecting persistent energy-price pressure and weaker activity.
- Households and firms will face higher borrowing costs as mortgage and business loan rates pass through, savers may see slightly higher deposit returns such as on regulated accounts, and governments face larger debt-servicing bills with uneven national impacts.
- Economists are split on timing and effectiveness because the shock is largely imported from energy markets, markets are watching ECB forward guidance closely, and other major central banks have not uniformly followed the ECB’s tightening.