ECB raises rates to 2.50% and lifts growth forecasts for 2026 and 2027

On 10 September 2026 the Governing Council of the European Central Bank raised the three key interest rates by 25 basis points: the deposit rate rises to 2.50%, the rate on main refinancing operations to 2.65%, the rate on the marginal lending facility to 2.90%. The changes take effect on 16 September 2026. It is the second increase this year, following the one in June and the pause decided in July.

The reason given by the central bank for the change of framework is a resilience of the euro area economy greater than expected in previous forecasts. It is on this observation that the revision of estimates released together with the rate decision is based.

The new staff projections put euro area growth at 0.9% in 2026, up from the previous estimate of 0.8%, and at 1.4% in 2027, up from 1.2%. For 2028 the indication is 1.5%.

On the price front the movement goes in the same direction. Headline inflation is estimated at 3% in 2026, at 2.5% in 2027 — up from the 2.3% previously indicated — and at 2.1% in 2028, against 2% in past projections. The core component, net of energy and food, is seen at 2.5% this year, at 2.6% in 2027 and at 2.3% in 2028: a profile that in 2027 exceeds the headline index. The most recent published data concerns August 2026, when euro area inflation rose to 3.3%, the highest value since September 2023, driven by energy prices.

Alongside the central scenario, the ECB has published an adverse hypothesis built on a worse dynamic of energy prices. In that case growth would remain at 0.9% in 2026 but would fall to 1.1% in 2027, while inflation would stand at 3.1% and 3.2% in the two years. This is a measure of how much the revised framework depends on a single variable.

The Governing Council’s statement openly declares the uncertainty of the outlook, signalling “risks tilted to the upside for inflation and to the downside for economic growth” (European Central Bank). It should be noted: the figures on 2026, 2027 and 2028 are staff projections, not actual data, and the revisions indicated in this same round — both on growth and on prices — show how much those numbers shift compared with the previous round. The only actual figure reported here is August inflation.

For euro area countries the operational step is 16 September, the day on which the new rates take effect and from which the transmission to financing costs will be measured. The next appointment with actual recorded figures, not estimates, will be the reading of September inflation.

Sources: MilanoFinanza; FinanzaOnline; Teleborsa; MutuiSupermarket.