ECB raises rates to 2.5% as oil prices hit $100 and gas surges 190%

The European Central Bank raised its key three-month interest rates by 0.25% on Thursday, setting the deposit rate at 2.5%. This marks the second adjustment in three months amidst conflicting economic pressures. Brent crude climbed above $100 per barrel as tensions between the United States and Iran disrupted shipping through the Strait of Hormuz. Meanwhile, the Dutch TTF gas benchmark surged 190% since January. Eurozone inflation accelerated to 3.3% in August, up from 2.9% the previous month. Energy prices accounted for a 14.3% annual increase last year compared to 10.3% in July. Christine Lagarde stated that Middle East conflicts sustain inflationary pressure and rates must remain well above target for an extended period. The central bank acknowledged it cannot physically reopen shipping lanes or refill gas storage facilities, yet it proceeds with the hike to manage broader economic stability.