ECB raises eurozone interest rates as Iran war stokes inflation

The European Central Bank has raised interest rates for the first time since 2023 in response to higher inflation caused by the war in Iran. The ECB raised its main deposit rate from 2% to 2.25% and financial markets are pricing in two more rises by next spring. Eurozone consumer price inflation rose to 3.2% in May 2026, up from 3% in April, sparking concerns that the conflict in the Middle East will force manufacturers and retailers to push through price increases into the summer and autumn to …