ECB Set for Another Rate Hike Amid Euro Zone Inflation Surge

The European Central Bank (ECB) is likely to raise interest rates again this month as inflation in the euro zone accelerated to 3.3% in August, driven by higher energy costs.

According to data from Eurostat, the 21-nation sharing the euro saw a jump in inflation from 2.9% in July, with crude oil and natural gas prices rising, and refiners increasing their margins.

While core inflation, which excludes volatile food and fuel prices, eased to 2.4%, underlying price pressures remained modest, offering some reassurance to policymakers.

The ECB's decision to raise the deposit rate to 2.50% on September 10 is seen as a relatively easy one, with financial investors already pricing in the move.

Policymakers appear to have no appetite for now to signal any further rate hikes, and economists see a high chance that the ECB will stop at this level, holding rates at what many consider the top end of the 'neutral' range.