ECB Prepares Second Rate Hike Amid Elevated Inflation

The European Central Bank is poised to increase its key interest rates for the second time since the US-Iran conflict began. The main refinancing rate is expected to rise to 2.65%, and the deposit rate to 2.5%. This decision comes as inflation in the Eurozone accelerated to a three-year high of 3.3% in August, surpassing the ECB's target of 2%.

Economists remain uncertain about the need for further tightening, warning that additional hikes could lead to recession. However, interest-rate futures are pricing in a third increase by December, indicating ongoing market expectations of continued rate rises.