EZ ECB Monetary Policy Statement

LAGARDE: TODAY'S DECISION NOT A FORCEFUL" ONE ECB'S LAGARDE: 25 BPS HIKE IS A SIGNAL AND IS NECESSARY ECB's Lagarde: We have not discussed the neutral rate ECB's Lagarde: We Are Beginning To See Broadening Of Inflation. We Will Be Extremely Attentive ECB President Lagarde (Q&A) states the main risk today would be to not take this sort of decision

LAGARDE: DECISION WAS UNANIMOUS ECB's President Lagarde: There will be no pre-set rate path ECB's Lagarde: Discussion was not at all about insurance hike ECB's President Lagarde: Indirect cost of Iran war also showing up. ECB's Lagarde: If we were not taking this very obvious monetary policy decision, we'd be north of our target at the end of the projection horizon

Good afternoon, the Vice-President and I welcome you to our press conference. The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at our two per cent target in the medium term. In line with this commitment, we today decided to raise the three key ECB interest rates by 25 basis points. The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area. In the baseline of the new Eurosystem staff projections, headline inflation is expected to average 3.0 per cent in 2026, 2.3 per cent in 2027 and 2.0 per cent in 2028. For inflation excluding energy and food, the baseline foresees an average of 2.5 per cent in 2026 and 2027 and 2.2 per cent in 2028. Compared with March, staff have revised up their baseline projection for inflation in 2026 and 2027 owing to a higher path for energy prices, which, to some extent, is expected to feed into food, goods and services inflation. The baseline sees economic growth at an average of 0.8 per cent in 2026, 1.2 per cent in 2027 and 1.5 per cent in 2028. This is a downward revision for 2026 and 2027, reflecting a more pronounced impact of the war on commodity markets, real incomes and confidence. The outlook remains unce ECB's President Lagarde: Risks to inflation outlook are to the upside. LAGARDE: FINANCIAL CONDITIONS TIGHTER THAN BEFORE WAR ECB's Pres Lagarde: Wage Trackers Continue to indicate easing labour costs In 2026 - Some Indicators Of Underlying Inflation Have Already Been Driven Higher By Energy Shock - Most Measures Of Longer-Term Expectations Stand At Around 2%

The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term. In line with this commitment, it today decided to raise the three key ECB interest rates by 25 basis points. The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area. In the baseline of the new Eurosystem staff projections, headline inflation is expected to average 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028. For inflation excluding energy and food, the baseline foresees an average of 2.5% in 2026 and 2027 and 2.2% in 2028. Compared with March, staff have revised up their baseline projection for inflation in 2026 and 2027 owing to a higher path for energy prices, which, to some extent, is expected to feed into food, goods and services inflation. The baseline sees economic growth at an average of 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028. This is a downward revision for 2026 and 2027, reflecting a more pronounced impact of the war on commodity markets, real incomes and confidence. ECB RAISES DEPOSIT RATE TO 2.25% FROM 2.0% ECB RAISES REFI RATE TO 2.4% FROM 2.15% ECB: Outlook remains uncertain, with upside risks for inflation and downside risks for economic growth. ECB raises interest rates for the first time in three years as Iran war fuels inflation The European Central Bank has lifted its deposit facility rate by 0.25% to 2.25%, marking a decisive pivot back to tightening as the Iran war pushes eurozone inflation to its highest level in nearly three years. The European Central Bank has raised interest rates for the first time in nearly three years, lifting its deposit facility rate from 2% to 2.25% following its governing council meeting on Thursday. The ECB sets monetary policy for the eurozone through three key interest rates, with the deposit facility rate serving as its main policy benchmark. The ECB’s deposit facility rate was last raised in September 2023, when it reached its peak of 4.0% after a tightening cycle meant to stabilise the post-pandemic inflation crisis. The ECB also raised its main refinancing operations rate to 2.4% and its marginal lending facility rate to 2.65%.