Eurozone Inflation Hits 3.3%, ECB Expected to Raise Rates Again

The European Central Bank (ECB) is set to hold its monetary policy meeting on September 10, with markets widely expecting it to raise its key interest rate by another 25 basis points.

This would mark the ECB's second rate hike amid rapidly rising energy prices, with the deposit rate projected to rise from 2.25% to 2.50%.

The primary reason behind the European Central Bank's decision to tighten policy once again is inflation data, which shows that the eurozone's harmonized index of consumer prices is expected to rise 3.3% year-on-year in August, up from 2.9% in July and marking the highest level since September 2023.

Energy prices surged 14.3% year-on-year, accounting for the bulk of the sharp rebound in overall inflation.