Economy
ECB raises rates to 2.5% as the energy shock spreads to borrowing costs
The European Central Bank raised its main interest rate from 2.25% to 2.5% and warned that renewed Middle East fighting could keep inflation elevated for longer. Brent briefly exceeded $105 a barrel, while European gas and government bond yields climbed. This advances yesterday's oil story: the shock is now prompting a central-bank response and increasing financing costs. The ECB forecasts 3% inflation this year but has not committed to its next rate move.
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What matters
- The ECB raised its 2026 growth forecast to 0.9%, alongside its inflation warning.
- EU gas storage was reported at 67%, below the five-year average of 84%, leaving winter replenishment exposed to high prices.
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