ECB expected to raise euro zone rates to 2.50% Thursday
The European Central Bank (ECB) is expected to bump up interest rates to 2.50% this Thursday, thanks to stubborn inflation driven by soaring energy costs.
The Iran war has disrupted energy supplies since the end of August, causing oil and gas prices to spike and keeping euro zone inflation above the ECB's 2% target.
Markets expect more ECB hikes
Markets are betting on another two or three rate hikes by the end of 2027, especially with Brent crude hitting $100 a barrel.
While core inflation dipped last month and consumer expectations eased, producer costs are rising fast, so inflation could stick around longer.
Despite all this, the euro zone economy is holding up well with solid growth and more bank lending, though policymakers might push back their goal for getting inflation down.