The ECB raises interest rates by a quarter of a point. Lagarde: "We navigate uncertainty"

The Governing Council of the ECB has decided to raise the three ECB reference interest rates by 25 basis points.

Therefore, we read in the Eurotower note, the interest rates on deposits at the central bank, on main refinancing operations and on marginal refinancing operations will be raised respectively to 2,25%al 2,40% et al 2,65%with effect from June 17, 2026.

Lagarde, well positioned to navigate uncertainty

“With today’s decision we are well positioned to navigate the current uncertainty” caused by the war in the Middle East. The president of the ECB stated this Christine Lagarde at the press conference.

“The longer the war lasts” in the Middle East, the more the risks associated with an increase in inflation and a worsening of growth increase. This was underlined by ECB President Christine Lagarde. “Rising energy prices will push inflation further over the summer and keep it well above target in the first half of 2027,” he added. “Inflation is expected to return toward the “2%” target in the fall of 2027.”

Overall inflation projections

In the baseline scenario of the Eurosystem experts’ new projections, overall inflation would average 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028.

The revision of estimates

Inflation net of the energy and food component, the ECB estimates, would average 2.5% in 2026 and 2027 and 2.2% in 2028. Compared to the March exercise, our experts have adjusted upwards the projections for inflation for 2026 and 2027 in the baseline scenario, above all due to the higher trajectory of energy prices, which to a certain extent should be passed on to consumer inflation. food, goods and services.

ECB cuts Eurozone GDP estimates, +0.8% in 2026, +1.2% in 2027

In the baseline scenario, economic growth would average 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028. This is a downward revision for 2026 and 2027 that reflects the more pronounced impact of the war on commodity markets, real incomes and confidence. The ECB notes this.