Overview
- The European Central Bank raised its deposit rate by 25 basis points to 2.25% on Thursday, June 11, 2026, marking its first increase since 2023.
- ECB staff raised the 2026 headline inflation forecast to about 3.0% and trimmed the growth outlook to roughly 0.8% as energy costs from the Iran conflict push prices higher.
- President Christine Lagarde said the decision was unanimous and described the hike as necessary to guard against broader inflation while the bank follows a meeting-by-meeting, data-dependent approach.
- Markets had largely priced in the move so attention now centers on the ECB’s updated projections and forward guidance for signals about whether further hikes will follow and how other central banks will react.
- Economists warn the step risks weighing on a weak eurozone economy if the energy shock proves temporary, and households and firms face higher borrowing costs that could reduce spending and investment.