The European Central Bank is all but certain to raise interest rates on Thursday, with investors pricing the move at near-total probability, but the decision is more awkward than the numbers suggest as inflation is being driven almost entirely by energy with underlying pressures actually easing.

The ECB plans a second 2026 rate hike, raising its deposit rate to 2.50% as eurozone inflation hits 3.0% amid surging energy prices and

Deutsche Bank has raised its peak ECB interest rate projection to 2.75%, forecasting additional 25 basis point hikes in September and December. Persistent energy risks and…