ECB Set to Hike Interest Rates Amid Energy Inflation Pressures

The European Central Bank (ECB) is expected to raise its key deposit rate on Thursday in response to rising energy inflation driven by the ongoing US-Iran conflict.

Analysts project that the ECB's Governing Council will increase the deposit facility rate by 25 basis points to 2.5 percent, and the main refinancing rate to 2.65 percent.

This would mark the second rate hike since the Middle East conflict disrupted oil supplies and pushed eurozone inflation to 3.3 percent in August, exceeding the central bank's 2 percent target.

'We expect the ECB to announce a second interest rate increase at the September 10 meeting, bringing the deposit rate to 2.5 percent,' said Michael Krautzberger, global chief investment officer of public markets at Allianz Global Investors.