ECB Hike Expectations Rise as Eurozone Inflation Hits 3.3%

European stocks steadied on Thursday after plummeting to a one-month low in the previous session, as investors anxiously await the European Central Bank's (ECB) decision on interest rates.

The pan-European index rose by 0.1% in early morning trade, partially reversing Wednesday's 1.4% drop, which saw it close at its lowest level since late July.

The ECB's Governing Council meeting in Frankfurt marks a significant shift in market expectations, with money markets now almost fully pricing in a 25-basis-point interest rate increase, taking the benchmark deposit rate to 2.50%.

This drastic change from previous expectations of no rate hike comes after a series of macroeconomic and geopolitical shocks, including direct military clashes in the Middle East, which sent crude oil soaring past $100-a-barrel.