Raises three main rates by 25 bpsCompared to June, baseline inflation projection for 2026 is unchanged but it has been raised for 2027 and 2028ECB says stands ready to adjust all instruments within its mandate to ensure inflation stabilizes at 2% in the medium termECB is not pre-committed to any pathThe euro sold off ahead of the announcement in a broad USD rally but it's bounced slightly to 1.1618. This is the second rate hike this year but was widely signaled ahead of time. Changes to economic forecasts:The ECB raised its growth forecasts for 2026 and 2027, while lifting both headline and core inflation projections for the final two years of its forecast horizon.GDP growth is now forecast at 0.9% in 2026, up from 0.8%, and 1.4% in 2027, up from 1.2%. The 2028 forecast remains unchanged at 1.5%.The inflation revisions are the more hawkish part of the update. Headline inflation is now seen at 2.5% in 2027, versus 2.3% previously, and 2.1% in 2028, up from 2.0%. Core inflation was also revised higher in both years, reaching 2.3% in 2028.Taken together, the forecasts point to firmer growth but a slower return to the ECB’s inflation target—a combination that weakens the case for further rate cuts.Previous forecasts in parentheses. This article was written by Adam Button at investinglive.com.