ECB Hikes Rates Again Amid Iran War-Driven Inflation Fears

The European Central Bank (ECB) raised its benchmark interest rate to 2.5% on Thursday, citing persistent price pressures and inflation concerns triggered by the Iran war.

The rate hike is the second this year, with policymakers seeking to quell an energy-driven rise in inflation that has sent oil prices above $100 a barrel.

The ECB expects inflation to remain above its 2% target for some time, with projections showing it will reach 3.0% this year, 2.5% next year, and 2.1% in 2028.

Economists are divided on the need for further rate hikes, with some expecting one or two more moves this year and others thinking Thursday's move may be the ECB's last for now.