The European Central Bank maintains interest rates but raises inflation forecasts significantly due to the energy crisis driven by geopolitical tensions.
The European Central Bank (ECB) has decided to keep interest rates unchanged for the sixth consecutive time as it monitors the economic impacts of ongoing geopolitical conflicts, notably in the Middle East. The institution acknowledged that the war has introduced significant uncertainties affecting economic growth while raising the inflation outlook. Specifically, the ECB has elevated its inflation projection for 2026 from 1.9% to 2.6%, signaling the potential longer-term repercussions of the energy crisis on the economy.
