ECB Interest Rate Hike Expected as Euro-Area Inflation Surges

The European Central Bank (ECB) is likely to raise interest rates again in September as euro-area inflation strengthened in July, driven by a surge in oil prices following US-Iran strikes. The annual inflation rate rose to 2.9% in July from 2.8% in June, according to Eurostat.

Energy prices increased by 10%, while services and a gauge excluding volatile items such as fuels and food also accelerated. Economists and investors predict a hike in September, adding to the quarter-point step taken in June.

Kamil Kovar, head of euro-zone forecasting at Moody's Analytics, said 'Today's numbers, together with developments in the Middle East over the course of July, put the ECB firmly on a path to hike in September.'