Frankfurt, 26 August 2026 – European Central Bank policymakers are expected to raise interest rates at their September meeting as the euro area confronts energy-driven inflation from the Iran conflict. The anticipated move would lift the policy rate to 2.50 per cent from 2.25 per cent, while officials appear reluctant to commit publicly to additional tightening.
The central bank increased borrowing costs in June for the first time in nearly three years, seeking to prevent higher energy prices from spreading into wages, services and broader inflation expectations. With inflation running close to 3 per cent and economic activity proving more resilient than feared, another quarter-point increase is increasingly viewed as proportionate.
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