ECB Prepares Second Rate Hike in Response to Ongoing Iran Conflict

European Central Bank (ECB) policymakers last month thought they would need to raise interest rates again, possibly as soon as September, to combat the economic fallout from the ongoing Iran conflict.

The ECB kept interest rates steady at its July 22-23 meeting, having raised them for the first time in nearly three years in June to combat rising energy prices.

According to the ECB's account of the meeting, policymakers were already planning for a future rate increase, but wanted to see significant improvement in the inflation outlook before making a decision.

However, with inflation at nearly 3% and the euro zone economy showing signs of resilience, ECB governors are now poised to raise the policy rate again to 2.50% from 2.25%, on September 9-10.