Payment Radar
ECB Raises Key Interest Rates by 25 Basis Points Amid Persistent Inflation
The European Central Bank raised its three key interest rates by 25 basis points, effective September 16, 2026. The deposit facility rate is now 2.50%, the main refinancing rate is 2.65%, and the marginal lending rate is 2.90%.
What changed
The European Central Bank raised its three key interest rates by 25 basis points, effective September 16, 2026. The deposit facility rate is now 2.50%, the main refinancing rate is 2.65%, and the marginal lending rate is 2.90%. This decision was made because inflation remains well above the 2% target, driven by ongoing inflation pressures from the Middle East conflict. The ECB projects headline inflation to average 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028. The central bank will continue to make data-dependent decisions regarding future monetary policy. The European Central Bank is the central bank for the eurozone and sets monetary policy for the euro area.
Why a business should care
Higher interest rates increase borrowing costs for merchants and reduce consumer spending power, directly impacting revenue and operational expenses. The ECB’s rate hike increases borrowing costs for merchants across the eurozone and globally, as global financial markets often react to major central bank decisions. Higher rates can lead to reduced consumer spending, impacting merchant revenue. Additionally, the cost of accepting payments may rise if payment processors pass on higher funding costs. Merchants with variable-rate debt or those financing inventory will face increased operational costs.
Who it affects
Merchants with variable-rate debt, those financing inventory or equipment, and businesses whose customers are sensitive to interest rate changes.
What to consider doing
Merchants should review their financing agreements, consider locking in fixed-rate debt if possible, and monitor consumer spending trends to adjust inventory and pricing strategies accordingly. A concrete step an ordinary business owner can take this week is to pull their current loan or credit line statements and check the interest rate type (fixed vs. variable) and any upcoming rate adjustment dates.
Uncertainty and risks
Potential reduction in consumer spending due to higher borrowing costs, increased operational expenses for merchants, and uncertainty in future monetary policy. The ECB will continue to make data-dependent decisions regarding future monetary policy, meaning future rate changes are not guaranteed and depend on incoming economic data.
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