The European Central Bank has raised interest rates for the first time in nearly three years, lifting its deposit facility rate from 2% to 2.25% following its governing council meeting on Thursday.
The ECB sets monetary policy for the eurozone through three key interest rates, with the deposit facility rate serving as its main policy benchmark.
The ECB’s deposit facility rate was last raised in September 2023, when it reached its peak of 4.0% after a tightening cycle meant to stabilise the post-pandemic inflation crisis.
The ECB also raised its main refinancing operations rate to 2.4% and its marginal lending facility rate to 2.65%.
The hike in the key interest rates marks a clear reversal of the easing cycle that had defined the ECB's approach throughout much of 2025 and, with eurozone inflation hitting 3.2% in May, its highest reading since September 2023, driven by a 10.9% surge in energy prices.
