YEREVAN, August 26. /ARKA/. The European Central Bank (ECB) is ready to raise its key interest rate from 2.25% to 2.5% at its meeting on September 9-10 to curb inflationary consequences of the war with Iran. This was reported by Reuters, citing three sources.
In June, the ECB raised borrowing costs for the first time in nearly three years, aiming to prevent the war-induced rise in energy prices from spreading to other sectors of the economy.
According to the agency, arguments in favor of a new rate hike include inflation at nearly 3%, the ongoing conflict with Iran, and the resilience of the eurozone economy. ECB representatives consider the rising prices of natural gas and high gasoline costs as the main factors for price increases.
However, the regulator does not intend to signal further tightening of monetary policy for now. Long-term inflation expectations remain anchored near the ECB's target of 2%, although financial markets anticipate one or two more rate hikes.
The final position of the regulator will depend on inflation data for August and updated economic forecasts from the ECB, which will be presented at the September meeting.
