ECB Readies for Second Interest Rate Hike as Eurozone Inflation Surges

The Eurozone is bracing for its highest inflation rate in three years as energy prices continue to rise. According to market forecasts, annual inflation could accelerate to 3.3% in August, up from 2.9% in July and 2.8% in June.

Energy prices were the main driver of this increase, rising by 10% year-on-year. Core inflation, which excludes energy and food, also increased to 2.5%. The European Central Bank (ECB) has already raised its key interest rate in June by 0.25 percentage points to 2.25%, citing higher energy prices and the conflict in the Middle East as increasing inflationary pressures.

Market analysts believe that ECB governors are ready to raise interest rates again in September, this time to 2.50%. However, a decision will depend on August's inflation data and the central bank's new economic forecasts, which will be presented at the meeting on September 9 and 10.