The European Central Bank plans to raise interest rates to counter energy shock inflation, possibly marking its first shift toward tightening since 2023.

BlockBeats News, June 11 — The European Central Bank (ECB) is expected to announce a rate hike on Thursday, marking the first increase since 2023 to address energy price shocks triggered by the Middle East conflict.

The market widely anticipates that the ECB deposit rate will be raised from 2.00% to 2.25% to curb inflationary pressures caused by energy supply constraints due to tensions in the Strait of Hormuz.

Data shows that the eurozone's inflation rate in May has risen to 3.2%, significantly above the ECB's 2% policy target, with rising energy prices being the main driving factor.

This policy adjustment occurs amid economic growth pressures in the eurozone, with the economy contracting in the first quarter, and some economists warning that further rate hikes could further dampen growth and consumer confidence.

Analysts note that the Federal Reserve and the Bank of England have not yet synchronized their tightening policies, and the ECB's early action may reflect its greater sensitivity to energy-driven inflation. The market will focus on subsequent statements from President Lagarde to determine whether a new tightening cycle will begin.