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 to 3.2% in May, flash data showed earlier this month, as higher energy costs drove the region’s inflation rate further above the ECB’s 2% target.

 by just 0.1% in the first quarter of the year.

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Key Points

* ECB hikes its key interest rate to 2.25% as the Iran war continues to blow inflation off target.
* The central bank is the first among global peers to hike in response to the energy shock.
* ECB hikes inflation forecast and downgrades growth outlook.

![](https://m.stacker.news/144668)

Euro zone inflation [rose](https://www.cnbc.com/2026/06/02/inflation-euro-zone-iran-energy-costs.html) to 3.2% in May, flash data showed earlier this month, as higher energy costs drove the region’s inflation rate further above the ECB’s 2% target.

The euro zone economy [grew](https://www.cnbc.com/2026/04/30/euro-zone-economy-inflation-growth.html) by just 0.1% in the first quarter of the year.