The **European Central Bank** (ECB) increased its key interest rates in September 2026, setting the deposit rate at 2.5% and the refinancing rate at 2.65%. This decision aimed to control inflation, which had started to rise again after a period of decline since 2022. Inflation, or the general increase in prices, had reached 5.2% annually at the height of the Russian invasion of Ukraine in 2022, but by August 2026, it had settled at 2.4% nationwide. This rise in prices is particularly challenging for low-income households, who have less savings and lower living standards. According to Insee and Drees, 20% and 40% of households, respectively, are classified as the lowest income group. The ECB's main goal is to ensure price stability, which means keeping inflation in check. To achieve this, the bank raises interest rates, which can slow down economic activity and possibly lead to higher unemployment. Higher interest rates make borrowing more expensive for both banks and households, reducing overall consumption. In an environment of rising prices and higher borrowing costs, households face two major challenges in maintaining their spending: the cost of borrowing and the erosion of purchasing power due to inflation. In France, income growth has been slower than the rate of inflation, resulting in a real loss of purchasing power. In 2023, the 10% of the poorest French people saw their standard of living decline by 1%. For these households, who often lack the means to borrow or rely on limited savings, the gap between income growth and rising prices is especially severe. This situation is further complicated by the impact of the ECB's monetary policy on the labor market. The ECB's rate increases also affect businesses by making it more expensive for them to borrow money. Between July 2021 and July 2023, as the ECB's key rate rose from 0% to 4%, the borrowing rate for French companies increased from 1.08% to 4.42%. This has led to reduced investments, higher production costs, and a drop in demand for goods and services, contributing to job losses. Young people and those in the most modest households are especially vulnerable to these labor market changes. Between the last quarter of 2024 and the second quarter of 2026, the unemployment rate for those aged 15 to 24 increased by 5 percentage points, from 16.6% to 21.6%, while the unemployment rate for all workers rose by 0.8%. Monetary policy also affects household wealth. When interest rates are high, demand for real estate can increase, pushing up property prices. However, 30% of the least wealthy households own less than 40,000 euros in total wealth, mostly held in regulated savings accounts and without exposure to real estate. These households do not benefit from rising property values, and their wealth remains largely unchanged. This can widen the gap between the wealthy and the less affluent, deepening existing inequalities.