ECB Interest Rate Hike 'All But Certain' Amid US-Iran Conflict Uncertainty

The European Central Bank (ECB) is widely expected to raise its interest rates on Thursday, but uncertainty surrounding the US-Iran conflict has clouded its long-term policy path.

Data shows that markets are pricing in a 100% chance of a key rate hike by at least 25 basis points, according to LSEG data.

The ECB's September meeting comes days after inflation in the euro zone hit 3.3% in August, with energy inflation surging to 14.3%. This is a concerning trend for the ECB, which has said it will take a meeting-by-meeting approach to monetary policy.