The European Central Bank is expected to raise its policy interest rates on Thursday, marking a second increase since the start of the Iran war. Bloomberg reports that the ECB’s deposit rate will be lifted by 0.25 percentage points to 2.5%, according to a Bloomberg poll of analysts, with all but one forecasting the move.
Multiple outlets link the decision to renewed inflation worries connected to the Iran conflict. Free Malaysia Today says economists expect the ECB to raise the policy rate to 2.50% from 2.25% and to indicate it stands ready to tighten further if the inflation outlook does not improve. The central theme across reports is that the ECB weighs the inflation impact of the war against broader economic conditions, while guidance on future tightening is expected to be a key part of the decision.
