ECB Set to Hike Interest Rates Amid Inflation Concerns

The European Central Bank is expected to raise interest rates on Thursday after pausing in July. The central bank will announce its decision at 12:15 GMT, with ECB President Christine Lagarde's comments and updated economic forecasts closely scrutinized.

The Eurozone's Harmonized Index of Consumer Prices annual inflation accelerated to a nearly three-year high of 3.3% in August, remaining above the ECB's 2% target. Analysts at BBH explained that the Eurozone macro backdrop argues in favor of bringing the policy rate closer to the upper end of the ECB's neutral range.

With a rate hike on Thursday all but certain and little change expected to September's inflation and growth forecasts, the main focus will be on the language in the Monetary Policy Statement and President Lagarde's comments during the post-policy meeting press conference.