Story perspectives

ECB Raises Deposit Rate to 2.5% for Second Time

By Drooid · Sep 11, 2026, 12:46 PM UTC · How we work

Summary

Story summary

The European Central Bank raised its deposit rate to 2.5% on Thursday, its second hike in three months.
Eurozone inflation reached 3.3% in August, with energy prices up 14.3% year-over-year.
ECB President Christine Lagarde called the hike a ‘no-brainer’ and warned inflation will stay above target into 2027.
Markets price about 75 basis points of ECB hikes by mid-2027.
Analysts project a 3.0% deposit rate after December.

History

Historical Context

In 1981, Federal Reserve Chairman Paul Volcker raised the federal funds rate to 20%, ending the United States' double-digit inflation. The policy cut consumer price inflation from 13.5% in 1980 to 3.2% by 1983, according to the Bureau of Labor Statistics. Similarly, the European Central Bank lifted its deposit rate to 2.5% in August 2024, as President Christine Lagarde warned inflation will stay above the 2% target through 2027. Volcker’s aggressive tightening proved that decisive hikes can anchor price stability, implying the ECB’s current path may cement eurozone inflation expectations for the coming decade.

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Story summary

The European Central Bank raised its deposit rate to 2.5% on Thursday, its second hike in three months.
Eurozone inflation reached 3.3% in August, with energy prices up 14.3% year-over-year.
ECB President Christine Lagarde called the hike a ‘no-brainer’ and warned inflation will stay above target into 2027.
Markets price about 75 basis points of ECB hikes by mid-2027.
Analysts project a 3.0% deposit rate after December.

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