The European Central Bank lifted rates by 25 basis points, signaling another increase likely next quarter amid persistent inflation risks.
The European Central Bank increased its deposit rate by 25 basis points to 2.25% at its June meeting, matching market expectations. The move follows a series of hikes aimed at curbing inflation, which remains above the bank’s target despite recent declines.
Prior to the decision, economists had widely anticipated the 25bp increase, with many forecasting one final hike in September. The ECB’s statement emphasized upside risks to inflation, downplaying concerns over economic growth slowdowns.
Markets reacted modestly, with eurozone bond yields edging higher as investors priced in further tightening. The euro showed limited volatility against major currencies following the announcement.