Prices are soaring, and the European Central Bank may raise interest rates for the first time since 2023.

Due to the impact of the situation in Iran pushing up inflation, the European Central Bank is likely to begin its first rate hike since 2023. The conflict has been ongoing for over three months, keeping international oil prices high. Economists surveyed by Bloomberg generally expect the ECB to raise deposit rates by 25 basis points to 2.25%, making it the first major central bank in the world to hike rates due to regional conflict. Like the US and UK central banks, Eurozone policymakers have been cautious, hoping that the current inflation is only a short-term phenomenon. However, with limited progress in peace talks and prices rising in sectors beyond energy, the market increasingly expects the Eurozone to tighten monetary policy multiple times this year. The latest quarterly forecast may show that the May inflation rate has reached 3.2%, and is likely to continue rising. Analysts predict that inflation expectations for this year and next, as well as the closely watched core inflation pressure, will be significantly revised upwards. The European Central Bank will announce its interest rate decision on Thursday at 20:15 Beijing time, with ECB President Lagarde holding a press conference 30 minutes after the announcement.