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European Union

Limited room for manoeuvre · updated 10 September 2026

What they did

On 10 September the ECB raised its three policy rates by 25 basis points; the deposit rate rose to 2.50% and took effect on 16 September.

Why

Euro area inflation rose to 3.3% in August and energy prices were up 14.3% year on year; the ECB expects 2026 inflation of 3.0%.

What they must do

It must anchor energy-driven inflation expectations while managing the widening of spreads for heavily indebted members such as France, and limit the cost of entering winter with low gas storage.

What comes next

Futures markets price one more hike by year-end; the pre-winter level of EU gas storage and the TTF price are being watched.

Preference

Returning inflation to target without weakening growth further.

Observed behaviour

A stance that keeps tightening gradually despite a supply shock and manages financial stability risk verbally.

Sources

Related events

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Reports

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The buffer is thin in two places at once: European storage at 68.5% while the Asian spot climbs to 30 dollars

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