ECB Set for Second Rate Hike Since Iran War Amid Soaring Inflation

The European Central Bank (ECB) is set to raise its deposit rate to 2.5% on September 10, according to a Bloomberg survey of economists. This would be the ECB's second increase since the Iran war, following a move in June.

The decision comes as euro-area consumer inflation rose above 3% last month, driven by energy price increases tied to the conflict. Economic growth has also held up better than expected, strengthening the case for another rate increase.

Markets are pricing in at least two more rate hikes, but economists are relatively skeptical about further tightening. ECB officials are divided on the need for additional increases, with some arguing that 2.5% is too high and others calling for caution to avoid damaging the economy.