ECB Tightens Policy for the First Time Since 2023 Amid Energy Shock
The European Central Bank raised its key rates by 25 basis points to 2.25%, the first hike by a G7 central bank since 2023, in response to a persistent energy shock from the Middle East that is feeding inflation. Christine Lagarde said the move was a robust policy decision, not insurance, and the ECB also lifted inflation projections while cutting growth forecasts, with markets pricing in potential further tightening later this year.