The European Central Bank lifts rates by 25 basis points, citing energy-driven inflation pressures from the Iran conflict.
The European Central Bank increased its key interest rate by 25 basis points to 2.25%, marking its first hike since 2023. The move comes as the Iran war escalates energy costs, pushing inflation above target levels.
Markets had fully priced in a rate increase ahead of the June Governing Council meeting, with LSEG data showing near-100% probability of at least a 25-basis-point hike. The decision reflects concerns over persistent inflationary pressures in the eurozone.
No immediate market reaction was detailed in the announcement, though the rate adjustment aligns with expectations.