The European Central Bank (ECB) raised its three key interest rates by a quarter of a percentage point on Thursday (10 September), or 25 basis points in the jargon.
That takes the bank’s main interest rate to 2.5 percent, the second hike in three months.
The reason given is the conflict in the Middle East, which has pushed up oil and gas prices. European reference gas prices stood at €82 per megawatt-hour on Thursday, roughly triple what it was before the war.
It’s the sharpest rise in energy costs since January 2023, driven by a 14.3 percent year-on-year increase in energy prices after the renewed disruption of the Strait of Hormuz.
Euro area inflation rose to 3.3 percent last month, up from 2.9 percent in July.
