{"id":128324,"date":"2026-06-11T16:54:30","date_gmt":"2026-06-11T12:54:30","guid":{"rendered":"https:\/\/noortrends.ae\/en\/?p=128324"},"modified":"2026-06-11T16:54:34","modified_gmt":"2026-06-11T12:54:34","slug":"ecb-hikes-rates-for-first-time-since-2023-iran-war-energy-shock-forces-inflation-forecasts-higher-growth-lower","status":"publish","type":"post","link":"https:\/\/noortrends.ae\/en\/ecb-hikes-rates-for-first-time-since-2023-iran-war-energy-shock-forces-inflation-forecasts-higher-growth-lower\/06\/11\/market-updates\/","title":{"rendered":"ECB Hikes Rates for First Time Since 2023: Iran War Energy Shock Forces Inflation Forecasts Higher, Growth Lower"},"content":{"rendered":"\n<h1 class=\"wp-block-heading\"><\/h1>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Takeaways<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>ECB raises rates:<\/strong> The deposit rate was lifted to 2.25% from 2% \u2014 the first increase in almost three years \u2014 in line with expectations.<\/li>\n\n\n\n<li><strong>Iran war the trigger:<\/strong> A spike in energy prices driven by the Middle East conflict is the primary force behind the policy shift.<\/li>\n\n\n\n<li><strong>Eurozone inflation above target:<\/strong> Price growth now stands above 3%, topping the ECB&#8217;s 2% objective.<\/li>\n\n\n\n<li><strong>&#8220;Robust across scenarios&#8221;:<\/strong> The ECB said the hike is justified across a range of possible outcomes for how the conflict may evolve.<\/li>\n\n\n\n<li><strong>Inflation forecasts raised:<\/strong> The ECB now sees headline inflation at 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028 \u2014 up from prior forecasts of 2.6%, 2.0%, and 2.1%.<\/li>\n\n\n\n<li><strong>Growth forecasts cut:<\/strong> Eurozone GDP is now expected at 0.8% this year, down from the prior 0.9% projection.<\/li>\n\n\n\n<li><strong>Stagflation risk grows:<\/strong> Higher rates arriving alongside slowing growth and surging energy costs present a difficult policy dilemma.<\/li>\n\n\n\n<li><strong>September hike fully priced:<\/strong> Markets are already betting on a follow-up move; Lagarde&#8217;s press conference tone will be closely parsed.<\/li>\n<\/ul>\n\n\n\n<p>The European Central Bank has lifted its main deposit rate to 2.25% from 2%, in line with expectations, as policymakers aim to keep a lid on upward inflationary pressures being fueled by a spike in energy prices due to the Iran war.<\/p>\n\n\n\n<p>Bets have grown that central banks will need to take a more hawkish policy stance in response to the oil shock. In the Eurozone currency area, the rate of price growth now stands above 3% \u2014 topping the ECB&#8217;s 2% target.<\/p>\n\n\n\n<p>In a statement, the ECB said the decision to raise rates for the first time in almost three years is &#8220;robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook&#8221; for the 21-member Eurozone. The hike puts the ECB in a position to navigate uncertainty caused by the now more than three-month-old conflict in the Middle East, officials argued.<\/p>\n\n\n\n<p>New Eurosystem staff projections now predict that headline inflation will average 3% this year, 2.3% in 2027, and 2% in 2028. Previously, the ECB had seen the figures at 2.6%, 2%, and 2.1%, respectively.<\/p>\n\n\n\n<p>Eurozone growth forecasts, meanwhile, were slashed. Gross domestic product in the region is now seen at 0.8% this year, compared to prior predictions of 0.9%.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways ECB raises rates: The deposit rate was lifted to 2.25% from 2% \u2014 the first increase in almost three years \u2014 in line with expectations. Iran war the trigger: A spike in energy prices driven by the Middle East conflict is the primary force behind the policy shift. Eurozone inflation above target: Price &hellip;<\/p>\n","protected":false},"author":9,"featured_media":127914,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6827,49,37,39,36],"tags":[],"class_list":["post-128324","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-daily-economic-reports","category-economic-reports","category-forex-markets","category-global-stock-markets","category-market-updates"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/128324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=128324"}],"version-history":[{"count":1,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/128324\/revisions"}],"predecessor-version":[{"id":128325,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/128324\/revisions\/128325"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/127914"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=128324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=128324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=128324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}