ECB to Deliver 25bps Rate Hike Amid Ongoing Economic Uncertainty

The European Central Bank (ECB) is set to raise its deposit rate by 25 basis points to 2.50% today, a move that has already been fully priced in by markets.

With the decision itself unlikely to provide much of a surprise, attention will focus on President Lagarde's press conference following the meeting.

The ECB is facing a complicated backdrop with eurozone headline inflation accelerating to 3.3% year-over-year in August and energy prices rising sharply due to ongoing geopolitical tensions and disruptions in the Strait of Hormuz.

However, core and services inflation have continued to moderate, and economic activity has proven more resilient than expected.