New Mideast fighting keeps eurozone rate-setters on edge
Fresh fighting in the Middle East and renewed energy price rises have thrown a curveball at the European Central Bank as policymakers mull whether to hike interest rates again this week.
The ECB lifted borrowing costs in June for the first time since 2023 in response to the jump in eurozone prices triggered by the conflict.
After Washington and Tehran struck a deal towards ending the war and inflation started easing back towards the ECB’s two-percent target, a hold in rates at the central bank’s meeting on July 23 looked like a done deal.
But fighting has flared between the two sides again, with Iran declaring key energy route the Strait of Hormuz closed, and oil prices have risen anew.
