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

The European Central Bank (ECB) is widely expected to raise interest rates on Thursday, but market watchers are divided on what comes next.

According to LSEG data, markets are pricing in a 100% chance of the ECB raising its key interest rate by at least 25 basis points.

The decision to raise interest rates comes after data showed inflation in the euro zone hit 3.3% in August, with energy inflation surging to 14.3%.

ECB officials have said they will take a meeting-by-meeting approach to monetary policy, but uncertainty around the U.S.-Iran war is clouding the outlook for its longer-term policy path.