ECB Set to Raise Interest Rates on Thursday With Expectations of a Second Hike in September

The European Central Bank is heading toward raising interest rates at its upcoming meeting on Thursday, in a move expected by the majority of analysts who believe a second hike will follow in September to contain persistent inflation in the eurozone.

A number of economists pointed out that the eurozone still faces higher-than-targeted inflationary pressures, making a pause by the European Central Bank in raising interest rates unlikely at the current stage, despite the economic slowdown in some European economies.

In the same context, investors are monitoring the statements to be issued following the meeting, as they may reveal the future path of European monetary policy and whether the bank intends to continue tightening beyond September or begin to pause.

Thursday's decision remains pivotal in determining whether the European Central Bank will move toward further monetary tightening or begin preparing to stop raising interest rates.

What do these terms mean?

European Central Bank: The institution responsible for managing monetary policy for the eurozone, making its interest rate decisions from its headquarters in Frankfurt, Germany.

Eurozone: Comprises 20 European countries that share the single euro currency, with their monetary policies subject solely to the decisions of the European Central Bank.

Inflation: A continuous increase in the price level over time, reducing the purchasing power of money; central banks typically resort to raising interest rates to curb inflation.