The European Central Bank (ECB) has decided to raise the three key ECB interest rates by 25 basis points. The interest rates on the deposit facility, the main refinancing operations, and the marginal lending facility will be increased to 2.50%, 2.65%, and 2.90%, respectively, with effect from 16 September 2026. This decision underscores the Governing Council's commitment to setting monetary policy to ensure that inflation stabilizes at its 2% target in the medium term. The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period. The baseline of the new ECB staff projections sees headline inflation averaging 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028. For inflation excluding energy and food, the baseline foresees 2.5% in 2026, 2.6% in 2027, and 2.3% in 2028. The baseline projection for economic growth is 0.9% for 2026, 1.4% for 2027, and 1.5% for 2028. The ECB will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:45 CET today. The press conference will provide further insight into the ECB's decision and its implications for the euro area economy. The ECB's decision to raise interest rates is aimed at reducing inflation and ensuring price stability in the medium term. The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilizes at its 2% target and to preserve the smooth functioning of monetary policy transmission. The Transmission Protection Instrument is available to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across all euro area countries.