ECB likely to raise rates as Middle East tensions lift oil prices

Barclays analysts expect the European Central Bank to increase its policy rate in September, citing stronger‑than‑expected economic data and rising cost pressures. Their quarterly growth tracker shows a 0.5 % increase, raising the outlook for euro‑area growth above the official 0.2 % forecast.

At the same time, markets are pricing in a possible rate hike by the Bank of England. U.S. strikes on Iranian targets and Iran’s retaliatory attacks on ships in the Strait of Hormuz have pushed oil prices higher, reviving inflation concerns. The heightened tension has also halted LNG tanker traffic through the strait since 11 July, affecting deliveries from Qatar and the United Arab Emirates. European gas prices rose 3.7 % to €50.61 per megawatt‑hour.