ECB Set to Hike Rates Amid Iran Conflict Fuelled Inflation

The European Central Bank (ECB) is expected to raise interest rates for the second time this year on Thursday, September 10. The rate hike comes in response to rising energy prices due to the ongoing conflict between the US and Iran.

Economists predict that the ECB will increase its policy rate to 2.5% from 2.25%, with some expecting further tightening if inflation does not improve. A recent surge in oil and gas prices has sent Brent crude briefly touching $100 a barrel on Wednesday, September 9.

The eurozone economy remains resilient despite the rising fuel costs, competition from China, and drought impact. The ECB's rate hike in June did not put significant pressure on economic activity, leaving room for further tightening if necessary.