ECB Warns Inflation Will Stay Above Target

The European Central Bank (ECB) is preparing to tighten monetary policy in September. According to Philip Lane, the ECB's chief economist, inflation in the eurozone will likely remain above the 2 per cent target for the rest of the year.

Lane told Irish broadcaster RTE that inflation is currently at a 3 per cent level and may stay there until the end of the year. However, he noted that this projection is dependent on finding a solution to the crisis in the Middle East, which is an uncertain situation.

The markets are expecting a rate rise in September, following the ECB's decision in July to leave rates unchanged despite inflation rising to 2.9 per cent in June.