ECB Set for Another Rate Hike as Euro Zone Inflation Surges

The European Central Bank (ECB) is expected to raise interest rates again this month as inflation in the euro zone rose above 3% in August, driven by higher energy costs.

According to data from Eurostat, inflation accelerated to 3.3% in August from 2.9% in July, with core inflation easing to 2.4% last month from 2.5%. The increase in energy prices was largely due to a rise in crude oil and natural gas costs.

Despite the higher inflation rate, policymakers appear to have no appetite for further rate hikes beyond this month's move, which is widely expected to be a relatively easy decision.

The ECB has already priced in the upcoming rate hike, with financial investors focusing on the bank's rate path further down the line. Economists see a high chance that the ECB will stop raising rates after this month, holding them at what many consider the top end of the 'neutral' range.