President of the European Central Bank Christine Lagarde during a press conference in Frankfurt, Germany, on April 30, 2026. HEIKO BECKER/REUTERS
It was not the moment for a rate hike just yet. But the European Central Bank left little room for doubt: It is preparing to raise interest rates, likely as soon as its next meeting, scheduled for June 11.
At the end of its Governing Council meeting, which concluded on Thursday, April 30, the monetary institution decided to maintain its key interest rate at 2%. The economic impact of the war in the Middle East – just two months after the start of the US-Israeli offensive – was still too recent for its consequences to be fully understood.
The trend, however, was clear: higher inflation and slower growth. "The war in the Middle East has led to a sharp increase in energy prices, pushing up inflation and weighing on economic sentiment," said ECB President Christine Lagarde. Recent statistics confirmed this: Annual inflation in the euro area, which stood at 1.9% in February, reached 3% in April; growth slowed to 0.1% in the first quarter, compared to 0.2% in the fourth quarter of 2025.
Dilemma in Frankfurt
