The European Central Bank raised its three key interest rates by 25 basis points on Sept. 10, lifting the deposit facility rate from 2.25% to 2.50%, the main refinancing rate to 2.65% and the marginal lending facility to 2.90%, effective Sept. 16. The second increase since June followed a renewed energy shock linked to fighting around the Strait of Hormuz, which pushed euro-area headline inflation to 3.3% in August and energy inflation to 14.3%. Brent crude moved back above $100 a barrel as U.S.-Iran exchanges of fire intensified. Underlying price pressures moderated, with core inflation falling to 2.4% and services inflation to 3.0%. ECB staff maintained a 3.0% headline-inflation forecast for 2026 and raised projections for 2027 and 2028 to 2.5% and 2.1%, respectively. The bank said the conflict would keep inflation above target for an extended period, while its economists found that energy supply factors accounted for about 90% of the increase in energy inflation between January and May. The deposit rate remains within the ECB's neutral range, leaving policymakers to decide whether further tightening is needed to restrain the economy.