The European Central Bank has raised its deposit facility rate from 2.00% to 2.25%, marking a 0.25 percentage point increase and the institution’s first rate hike since 2023. Between mid-2024 and mid-2025, the ECB delivered eight consecutive rate cuts totaling roughly 2 percentage points. That easing cycle is now officially over.
Why the ECB is hiking again
Eurozone headline inflation recently climbed above 3%, against the ECB’s price stability target near 2%. Geopolitical tensions, particularly in the Middle East, have disrupted oil supply chains and sent energy prices surging. The knock-on effects have pushed inflation projections for 2026 upward to approximately 2.6%. Core inflation has also been ticking higher.
ECB President Christine Lagarde is set to address the public following the decision. Market pricing had already priced this move in with near-certainty, with traders assigning close to 100% probability to the 25-basis-point hike heading into the meeting. Expectations for a follow-up increase in September are building.
What this means for crypto investors
