Europe · Business news · Economy · 10 Sept 2026
EU Financials Real Estate Utilities
The ECB raised its key rates by 25 basis points for the second time in 2026, lifting the deposit rate to 2.5%. President Christine Lagarde said the bank believed inflation would be longer lasting than it had anticipated and that risks were tilted to the upside for inflation and the downside for growth; the return to the 2% target was pushed back to the end of 2027. Euro-area inflation was 3.3% in August by the flash estimate, and attacks since late August had sent crude above $100 a barrel. Investors moved to price in more than three hikes over the next 12 months.
Each hike raises borrowing costs for governments, property companies and leveraged buyouts and weighs on rate-sensitive sectors such as real estate and utilities, while widening lending margins for banks such as BNP Paribas, Santander, Intesa Sanpaolo and ING. Higher yields on Bunds and other euro-area government bonds feed through to mortgage rates and household spending. The move also widens the interest-rate gap with Switzerland, where the SNB's policy rate is 0%.
Reported by Reuters via Khaleej Times — “ECB raises interest rates, bolstering bets for further moves” ↗ on 10 Sept 2026.
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