ECB Raises Key Rates by 25 Basis Points, First Hike in Three Years

The European Central Bank raised its three main interest rates by 25 basis points on June 12, marking its first rate increase in nearly three years. ECB President Christine Lagarde stated the decision was unanimous and signaled that tightening was necessary to prevent inflation from spiraling out of control. The ECB emphasized uncertainty remains ahead, with upside risks to inflation and downside risks to economic growth.

Meanwhile, the World Bank downgraded its 2026 global economic growth forecast to 2.5%, the lowest level since the COVID-19 pandemic. The bank warned that if energy supply disruptions intensify alongside significant financial stress, global GDP growth could slow to 1.3% in 2026.