European Stocks Face Weekly Lows as ECB Rate Hike Bites

By EC Assets · Published 11 September 2026

European stocks are set for their largest weekly decline since April as higher interest rates and rising energy prices weigh on investor sentiment. European equities traded near two-month lows on Friday. The European Central Bank (ECB) recently raised its benchmark deposit facility rate. The Governing Council's decision increased the rate by 25 basis points to 2.50%. This brings Eurozone borrowing costs to their highest level since April 2025. This ECB rate hike has contributed to the current market downturn. Bundesbank chief indicated that further European rate hikes are "very much dependent" on energy costs. UBS now expects the ECB to hike again in December. The ECB's decision to keep rates unchanged in April was a close call for some policymakers. Persistently high inflation made that decision increasingly difficult. The European Central Bank held policy rates steady in April, extending its pause for a seventh straight meeting in the current easing cycle. Governing Council members had stressed a lack of new information prior to the April 30 meeting. Markets expected rates to remain unchanged at that time. This article is intended for informational purposes only. It does not constitute investment advice.